This is a half-truth. The flying experience was much different back then. As another commenter posted, airlines competed on amenities then, they compete on prices now. Look at the ads from that era; you see full roasted turkey being served and even an in-cabin piano bar! Your statement lacks nuance and is comparing apples and oranges to shoehorn in a “regulation is bad” narrative.
In the US, government-regulated fares meant that fares were basically static on a given route. The only way to bring passengers to your airline was to serve places nobody else did, or to offer extras that slightly offset your profit in the hope that you'd get more, regular customers.
Since air travel was substantially more expensive then than now, the amenities gravitated to what attracted the most frequent fliers: businessmen. So stewardesses (they certainly weren't called flight attendants then) had weight limits, age limits, and if-you're-married-you-must-quit deals, and as a glance at some 1970s uniforms will show you, they were basically hiring models who happened to have the right skill set (usually at least one would be a trained nurse, and they all had to be reasonably confident) to dress them in revealing outfits. Like Hooters for travel.
If that's what you want, great. If you'd prefer other amenities... maybe not.
It has never struck me as coincidental that smoking was banned on US aircraft before no-smoking policies became nigh-universal at restaurants, but in just about the right timeframe for airplanes to shift from a boys' club to a place that catered to families.
If you want to pay more to get more, there are a lot of options, starting with coach plus (coach seats, business class legroom, priority boarding) and going through first class before branching out into niches like all-first-class flights (JSX is an airline in the US for which this is the business model; they fly smaller regional-size planes, and the reduced capacity legally allows them to skip the whole TSA and terminal experience and just let you on the plane if you show up and buy a ticket twenty minutes before departure) and then on into the various levels of chartered and truly private aviation.
You do, definitely, get what you pay for, but sometimes you don't need a Michelin-starred meal experience. And when that's the case, you've got cheaper options that didn't exist before deregulation (except for Southwest, which avoided problems by not making interstate flights at all in the early days.
A former co-worker who lived in Singapore at the time told me that that the deal with Singapore Airlines "flight attendants" was you got the job after college and then got married and left.
We can debate seat pitch I guess but economy seating hasn't been great for decades and something like United Polaris is better than Pan Am first class ever was even if food is arguably a downgrade.
Because most airlines have become monopolies at their respective hubs so their loss would severely inconvenience a ton of people so government is encouraged to prop them up.
For example, if Delta went under, Atlanta, Detroit and Salt Lake City would lose a total of 50%+ of their flights. That would be absolutely devastating.
Devastating to individuals sure. I hold a pretty high bar when it comes to something being truly critical enough for the government to bailout, economic concerns never meet that bar for me.
If we allowed markets to become monopolized we have to deal with that when the bill comes due rather than kick the can down the road.
If Delta went under another carrier would buy their planes and gate access at those airports, it might be chaotic for a short time but if there is enough demand to fly from point A to point B someone will provide the flights.
If Delta went under, one or more airlines would rapidly go "hey, there's a proven demand that's suddenly unmet", and there would very quickly be replacement flights.
