The public (and Congress) would not tolerate the massive drop in service that a return to regulation would cause. Also, if there was re-regulation, you could kiss alot of mainline and most RJ jobs goodbye, as competition was highly curtailed and routes restricted.
That being said, I agree with labatts that a minimum fare per segment would not be a bad way to go. Oh wait, but that would be collusion...Crandall suggested that once and was laughed at. What should have happened is after the initial bailout following 9/11, the ATSB should have quit throwing money at airlines and Congress should have prevented multiple extensions in the process. I have many friends that work for Airways and United, but if they had been allowed to die a natural capitalistic financial death two-three years ago (as deregulation intended), there would not be the massive industry-wide problem we are having now. Government assistance to ailing airlines is the only reason deregulation, to this point, has failed.