Hexes don't represent distance. Huh?!! Hexes only represent speed. I know speed usually equals distance.

The basic concept I guess is that the aircraft don't relate to the ground but to each other [...] The Pfalz D.XII is reported by various pilots to have lost anywhere from 150 feet to 490 feet in a 180 tight turn. So altitude isn't a problem, everyone is just considered to have started at the same altitude and falls out of the sky equally. Equal falling isn't going to happen, but one other design philosophy solves that. You are considered a competent pilot of your a/c and will compensate for the quirks of your a/c as needed.

As long as aircraft A gains or loses levels in a proper relation to aircraft B, the level difference doesn't have to represent distance as much as capability. The levels would represent spatial relationship, with the only real question being whether you are above, level or below the other a/c and what is your ability to change that relationship? And what effect does that have on your ability to put your guns on the target? The concept of the "energy fight" hadn't developed in WWI. In fact, many pilots felt that approaching an enemy machine from below and in his blind spot was better than being above him where he could see you. Billy Bishop seems to have favored this method of flying below the enemy machine and pulling up and firing into the belly. The SE5a Lewis gun was used for just this purpose by flying below and unsuspecting enemy and, while maintaining level flight, pull the gun down to the loading position and unload into the belly of the enemy a/c.

Oh dear, I've just gone off on a tangent and I'm going to use this to make notes.
Altitude rules for BM.
A\C climb and dive in relation to one another. Will have to determine just how much after researching climb rates. There are an unlimited number of levels.

When firing, you must be within 3 levels vertically of the target.

You fire as if one hex closer,(being above or below increase target size) but take the deflection modifier if firing from directly behind or ahead.

When changing levels down pay one less fuel. You may go up two fuel/speed numbers when diving, meaning you ignore restrictions going from a speed one to a speed 3.

All stall maneuvers are speed 0 and cost no fuel points. You must lose altitude on the turn following a stall (exception: this does not apply to the Fok. D.VII)

When diving S you lose levels equal to the speed number. When performing S maneuvers you must note any altitude change you intend on your movement sheet. You may only climb straight ahead.

When you move and change the facing of the a/c from the original facing, lose one level for each hexside turned.

When performing maneuvers 29S2 you may gain or lose 1-3 altitude levels, your choice of how many. When performing 32S3 or 33S3 you gain altitude. When performing 36 or 31 there is no loss or gain of altitude.

Do you know anyone out there willing to playtest these Face to Face and report back to me on how they work?

I'm sorry if I seemed to step on your ideas. I didn't mean to, but your suggestions stimulated a brainstorm that just wouldn't quit. That hasn't happened in a long time vis a vis BM. I'm not sure how the ideas I have presented would work, and yours might be better, playtesting both will tell.