Aircraft operating outside their optimum altitude range count as if engine damaged - they may not voluntarily do fast maneuvers, and if they take engine damage must dive until they reach an optimum altitude or reach low level, whichever comes first.
Altitudes are classed as Low, Medium and High, corresponding to 1-4,5-8, and 9-12 altitudes, respectively.
Optimum Altitudes:
Spitfires : MH
Bf109E : MH
P-40B : L
P-40E : LM
P-39 : L
I-16 : L
D520 : MH
Hurricanes : MH
Zero : MH
Wildcat : LM
Val : LMH
Stuka : LM
Dauntless : LM
Yak1 : LM
Gladiator : M
Fiat 42 : M
R2002 : M
Ki-61 : M
Ki-100 : MH
Hayabusa: MH
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