There is certainly a lot of competition in the airline business. Probably too much, the market is causing a retrenchment with a lot of "full service" airlines destined for oblivion, I think.
The public has spoken and what it wants is CHEAP SEATS. The airlines are convinced that the public wants the lowest possible price. So quality cannot be higher because customers aren't willing to pay.
If customers would pay more, the airlines would provide a better product. They do so on long haul routes where the customers are willing to pay more, after all.