Folks interested in my post earlier today about United's decision effectively to charge for using the overhead bin may also be interested in this: Until the late 1970's, the federal Civil Aeronautics Board pretty much set the routes and rates for commercial airlines and often directed the airlines how, if at all, to charge for amenities.
The Airline Deregulation Act of 1978, however, basically left that stuff to the airlines, with exceptions (of course). The law appears to have worked as intended to bring down airfares (though it may have had negative effects for some people, including leaving some rural areas unserved or underserved by commercial airlines).
Mark Perry, a scholar at the American Enterprise Institute, found in 2011 that, despite a recent uptick, air fares have dropped dramatically (adjusted for inflation). He also found that those hated fees — for baggage and so forth — are just a small part of what consumers pay. (I wonder what has happened since 2011.) Check out this graph:
