That's a little too simplistic, because hormone therapy does cause a considerable loss of muscle mass in trans women. So transitioned trans women would not be competitive with cis men in most sports.

Likewise, trans men gain muscle mass but not a more robust skeleton and larger lungs and so on. In those sports that rely heavily on muscle mass, though, trans men would have an immense advantage over cis women.

So it's a thorny issue. There's not a simple solution, except possibly for people who are not transitioning at all.