Ignition Override -
I don't understand how you can say the industy wasn't deregulated. Air carriers can fly anywhere they want to within the U.S. It wasn't like that prior to 1978. I got my first commuter job in 1978 due to deregulation.
Did all regulation go away? Of course not. FAA, IRS, SEC, etc, etc still exist. Slots have the largest impact on carriers ability to fly into whatever city they choose(ie JFK in 2008....). But the airline business is amazingly different than it was in the 70's due to deregulation.
If you want to understand what the business was before deregulation consider the current process to gain international flying rights. You apply, along with many other carriers and eventually the government says - "you win, everyone else loses."
Flew EMB-110's 1981-1982.