Pixies have an altitude limit of one, meaning they can only ever be one square high when they end their turn.
But if the party comes upon something like a chasm or a large pit, can the Pixie end their turn flying above the drop without falling, since they aren't technically increasing their altitude above the limit?
No.
According to the description of Altitude Limit (Monster Manual 2, pg 216), all that altitude limit cares is how high you are at the end of your turn. It doesn't matter if you moved vertically at all.
If you fly in a straight line over a pit, but end your movement on the other side of the chasm, you are safe. Otherwise you will crash and suffer all effects of that (falling damage, etc).
