Fierce competition resulted and drove fares down. Passengers flocked to airports in record numbers. Deregulation spurred the creation of dozens of new airlines and prompted many smaller airlines to expand. PeoplExpress, Presidential, New York Air, and other new airlines arose.

The U.S. Airline Deregulation Act of 1978 fundamentally shifted the industry from a government-controlled utility to a free-market competitive environment. By removing federal controls over fares, routes, and market entry, deregulation allowed new low-cost carriers (LCCs) like Southwest and People Express to challenge established "legacy" airlines. This forced legacy carriers to adopt the efficient "hub-and-spoke" model to maximize passenger loads and lower per-seat costs. Consequently, airfares have declined by over 40% in real terms since 1978, making air travel accessible to the general public rather than just the wealthy. However, while competition initially spiked, it also led to significant market volatility, numerous bankruptcies, and eventually a series of massive mergers that left the U.S. market dominated by four major players. Today, while consumers benefit from lower base prices and more frequent flights, they also face more restrictive "unbundled" pricing models and fewer choices in smaller, regional markets.