passed in 1978, airlines were treated pretty much like public utilities. Before that, the Civil Aeronautics Board regulated all interstate airline routes by setting fares, routes, and schedules. Airlines had their fares and routes approved by the CAB, and were able to charge enough to make a profit but prevented from overcharging - pretty much the way your electric company is regulated by your state utilities commission. If you're old enough to remember air travel before 1978, it was fairly expensive but it was also reasonably pleasant. The seats were wide enough; there was leg room; the food was decent; and passengers weren't treated like cattle.
But then some free-market enthusiasts decided it would be a good idea to get rid of the CAB and let the airlines compete among themselves, which, it was thought, would result in more airlines and lower fares. For awhile this was true. A lot of low-fare, minimum service new airlines were created, like People's Express and ValuJet (unfortunately some of these new airlines were also low-safety). Eventually and inevitably, however, the big ones started eating the little ones, and there went most of the competition the ADA was intended to create. Because of the need to keep fares low, most of the amenities were discontinued.
The basic reason the ADA was a flop is that airlines are very expensive to run and their profit margin is tiny. Their fixed operating costs - mainly fuel, equipment and maintenance - are very high (labor costs are also high, but when fuel and maintenance get too expensive and the airline isn't making money, guess who gets screwed, thanks in no small part to the Railway Labor Act, which grossly favors airline/railroad management over labor). So, now airlines are "free" to compete for passengers, but passengers have become used to low fares. In order to compete with the other airlines by keeping fares low, airlines started ordering planes with smaller seats in order to carry more passengers; they started charging more for baggage; there were no blankets, little or no food; etc. (to reduce weight). Most of the things (other than the TSA) that make air travel unpleasant these days are a result, directly or indirectly, of the ADA.
And before the ADA they didn't overbook because they didn't have to. The rationale for overbooking is that the airline's "product" is seats on the plane, and once the airplane takes off with empty seats, those "products" have become worthless. So they calculate the historical number of no-shows for any given flight, and if the expected number of people don't show up they can either re-sell those seats or accommodate standby passengers. (Note: I'm not defending this practice; I'm merely explaining it.)
So, I'd be in favor of repealing the ADA, reinstating the Civil Aeronautics Board and re-regulating airline fares and routes. I think air travel is sort of like health care: there is no "free-market" solution that actually works. It would be more expensive again but might incidentally encourage the development of better ground transportation, like high-speed rail. Not that the GOP would ever let any of this happen...
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