Please forgive me for not going into a more complex discussion in my previous post. You are quite right that there is more to the equation than price. However, post de-regulation, it was the most important driver that they immediately had to work with. Enough consumers were driven by price that airlines were forced to lower prices to remain competitive. Also, the price differences were significant enough to overcome many peoples' concerns about low quality, especially if their alternative was to not travel. Many attempts to start or run airlines at a higher level of service (e.g. business class airlines, MRTC) failed or were rolled back.

As pinniped points out, more recently, they have recognized that by offering many of these quality enhancements on a piece by piece basis, they can differentiate the market at different price points.

However, one thing that will never return is the concept of air travel as an intrinsically 'special' method of transportation - one that you would dress up for. As a child, I remember my parents insisting I wear a blazer and grey flannels to fly. Partially, this has disappeared because plane travel is no longer special, but also because society as a whole as become more casual. When I go to the opera, I still see some people wearing evening wear, but I also see people in jeans.