Is this paper going to be viewed in terms of conventional airline operations, or is this just general business studies, and you have chosen airlines?

I ask this because I think many of the arguments you have presented, which I will add are very commonly presented by the aviation industry, may not hold up as well looked at from the outside. For instance, many LCCs and value-driven airlines started not from the big airports but from the smaller airports. It can also be argued that in fact there is nothing stopping the legacy airline from offering a direct flight itself. It is only the airline's choice to fly everyone to a hub, since they believe the eventual outcomes - being able to offer more destinations - will outweigh the added costs. Airlines are not obligated to serve an airport - only certain ones, where they receive stipends for service, do they need approval to leave.

Another argument to be careful of is the price war. In the airline industry this is always held as an axiom, yet if you were to apply that same thinking outside of aviation you will fall flat. If the price being offered is too far below cost, there is no point in trying to match that price. Unless there is some substantial reason why an airline has greatly reduced costs, that airline must be loosing money as well. It is easier for a big company to survive losses than a small one - let the rival undercut their own prices and literally bleed themselves to death. The other side of that argument is what is the legacy airline doing to show to the consumer that they are going to get better value for their travel dollar? Any normal business will want to show how they have highlighted their own products benefits over their competitors, and have positioned their product as a better value, not just a cheaper option. In fact, your point about the Economy Plus benefit being a number one priority for frequent fliers is an argument to this.

The last issue I would be careful of is that you raised the issue that Southwest and JetBlue have successfully attracted business travelers, particularly through offering a better product. These are both essentially post-regulation airlines, each has been pretty successful. It is very hard to argue that deregulation has not provided benefits if consumers now have two choices of successful airlines that offer better benefits than the legacy carriers. Ultimately it is not in the interest of the government to simply sustain the value of a company name over consumer benefits. So this may not be a great argument for your case.