Sure they could've held it. Apple did it for a while. You could invest it and make even more, or invest a bit in not treating your passengers like f*cking cattle and constantly charging millions of fees, maybe?
You have lots of options to get better service - economy plus, priority boarding, buying food onboard that you no longer get by default. And of course upgrading to business class.
All these things cost more and you could either pay for it by default on every ticket like in the old days, or you can purchase them separately. Consumer demand has overwhelmingly indicated a preference for the latter. Sure the airlines could lower their margins and drive down prices on these things for customers slightly. We'd be in the exact same situation now though without any cash reserves so I don't see how that would have helped.
Also the prices don’t go down when oil prices do.