Once upon a time, airlines were more heavily regulated. It was harder for start-up airlines to get into the game. Fares were regulated to provide a fair profit for the airlines. Two of the goals of the Airline Deregulation Act of 1978 were to increase competition, and to reduce air fares.
Let me digress. When people drive their cars, they usually imagine the cost per mile is the cost of fuel. If gas is $3.25 a gallon and your car gets 40 miles per gallon, then it only costs 8¢ per mile. There are other costs involved that people never consider: Interest on the loan (if any), tires, oil changes and other routine maintenance, insurance, parking… The list goes on. OK, now let’s look at a Cessna Skyhawk. It burns a less than 10 gallons per hour, and let’s say avgas costs $6.00 per gallon and you go 130 miles per hour. (Wind is ignored, as are other factors.) It costs you $60/hour to fly, or around two bucks a mile. But the actual cost is almost double that when all of the other expenses are taken into account. Fill the seats, and the price comes down.
The point is that there are fixed costs and variable costs to operate an airline. Deregulation did indeed increase competition and reduce air fares. A plane ticket today costs a bit more than half of what it would have cost in 1978. Lower ticket prices push airlines closer and closer to the break-even point where revenue meets the fixed and variable costs. The margins are razor thin. There Ain’t No Such Thing As A Free Lunch. Something has to give. Free lunches, for example. Airlines have to save costs wherever possible, and find revenue wherever they can. You can’t have '70s-style comfort and amenities nowadays. Airlines have to fill every seat; not because they’re greedy, but because the have to so they don’t lose money. They have to reduce the number of flights so that they can fill every plane. They have to stop serving meals (at least to Economy Class). They have to charge for things that used to be included with the ticket price. It’s all about Freedom. Why make people pay for things they might not want? With the new à la carte system, people only have to pay for the extras they want. I fly with one bag. Why should I pay extra for my ticket because someone wants to take two bags? The downside is that cheaper air fares make it possible for more people to fly, flights are crowded (made worse because airlines put more seats into each aircraft), the number of flights is reduced, and things that once made flying pleasant (or at least less unpleasant) are not available or cost extra.
But there are more airlines now, and ticket prices are much cheaper than they used to be. The Piper still must be paid, however (pun intended ). Since consumers are unwilling to pay with cash by paying higher ticket prices, we must pay by accepting discomfort and inconvenience. Fuel is definitely a cost that factors into the equation; but the real problem is that there’s too much competition, and that results in ticket prices being too low to support the standards that were once taken as granted.
Not that any of that has anything to do with the subject at hand, of course.