That's where things can get rather interesting, since ALL of the major airlines at the time save for United Airlines, were AGAINST deregulation and full on competition.
The reason Ted Kennedy championed this cause, is because several studies were made showing that fares were kept artificially high by Civil Aeronautics Bureau regulation. Back then airlines, had to get approval from the CAB in order to open new routes and fares and timetable were more or less decided by the CAB as well. This is why you had magnificient service then, because the airlines could only compete openly on service and not on price.
You could have Wallace in a real quandary here. Torn between the potential price benefits of deregulation for the travelling public, and between the fear that once the CAB is dissolved the airlines will simply abuse their newly fund powers and fleece costumers and communities with excessive fares.
I would be interested to know how the airline/aerospace industry is responding to the much higher fuel prices. Boeing will likely still go ahead with both the 757 and 767 as per OTL, since both designs had fuel efficiency in mind. Douglas and Lockheed might make different moves from OTL, the former will still go down the path of the super 80, but Lockheed might try and design an Airbus out of their Tristar in order to stay in the market. If fuel prices stay high well into the eighties (likely if Saudia goes Taliban), I would expect prop-fans engines to be tested on a much larger scale than OTL, possibly leading to prop fan airliners (a major change from OTL).
Is Europe still building the Airbus as per OTL? I would tend to say yes.
Since Carter never became president, I imagine that nuclear reprocessing is not illegal in the US unlike OTL. I can therefore easily see government money poured poured into fast breeder reactors and unconventional designs like molten salt reactors during the eighties, in order to better use the fissile ressource.
There is a good potential for technology to deviate a lot from OTL as the POD moves back behind us. I realise that this may not be you best area of expertise, but try and imagine what could be there too.
Interesting ideas -- and I would see the Dept. of Energy under Stephen McNichols looking at more innovation and less restriction - the ecology/environmental movement will not be as much in the forefront, given economic concerns (jobs/cheaper energy vs. ecology) more voters will (or will be perceived to, since it is perception that drives politics) come down on the side of the jobs/cheaper energy.
Airlines will be looking thrift economy. I imagine this as a world where maybe half the flights of OTL (domestic anyway) are taking place - and we could see major airline mergers as a result. Fewer people are flying than OTL because of cost and unemployment. Deregulation could be seen as a way to make flying more economic, although the airline customer base may be narrower than OTL (business travellers more than leisure for example).
Airbus, 757, perhaps even something completely new would be a go as airlines would demand fuel efficient and more versatile aircraft even more
Someone has suggested High speed trains, but this economy could well see a revival of train travel (harking back to the thirties and forties) as an alternative to airline travel - if the costs are right - leading airlines to compete directly with rail companies and not necessarily each other.
