I don't know why people wish back the regulated years in the US. It's not that we want the regulations but the old good airlines from then.
Well, what happenes now is exactly this: Because of high fuel prices, the LCC are going down, while the systems and network carriers still are alive - well, more or less. Network carriers deliver more service (or, at least, should so in theory) and are spending therefore a smaller part of their budget on fuel.
The consequence should be that only a few will survive. As soon as we have monopolies again, prices will rise again, airlines will make profit and some of them might even invest in better passenger service. At the moment they just cannot.
The problem is that as soon as the big airlines are making profits again, some LCC are coming again, trying to take away their share. In the end, who will win, is the market. Funny that our American freinds are wishing away the good old free enterpreneurship, after all what we in Europe were told that free markets are the only solution...
Dani