do you really believe the airlines decide the fare
Yes I do, it's called competition, it works like this, 2 airlines fly to the same place and they want your business so they undercut each other to get it. In order to make a profit they have to get the max they can out of their employees. (sorry if that sounds patronizing, it's not meant to be)
The public, of course, want to pay as little as possible for the fare, as I'm sure you do when you buy a new car etc, but in the end if the airline says the ticket price is X then that is what the punter has to pay to get to where he wants to go. Whether or not this leads to a reduction in people flying is debatable.
If the regulators reduced the number of hours a pilot can fly/be on duty then the airlines would have to employ more of them to do the current number of flights, therefore ticket prices would have to go up.