President Carter signed the Airline Deregulation Act of 1978 into law

(CNN) -- Twenty years ago, air travel was mainly the domain of the elite. A cost-to-coast ticket cost about $400, a very high price in the 1970s.

There were no new airlines taking flight, and low fares were nonexistent.

Then came airline deregulation, which celebrates its 20th anniversary Saturday.

People now take for granted the ease and affordability of air travel, but it wasn't always that way.

In the late 1970s, airlines such as Pan Am, Eastern and Braniff ruled the skies, and the Civil Aeronautics Board (CAB) governed them, controlling routes and ticket prices, keeping fares high and eliminating competition.

During former President Jimmy Carter's administration, the CAB was led by Alfred Kahn, who became known as the "architect of deregulation."

Kahn remembers the state of the airline industry when he took office: "Nobody could fly an airplane commercially on any route without specific permission from the Civil Aeronautics Board, and price competition, cutting prices, was illegal."

Kahn, a retired Cornell University professor of economics, wanted change that would allow competition and let prices be set by the marketplace rather than the government.

The result of his work was the Airline Deregulation Act of 1978, signed into law by Carter, who predicted it would reduce airfares by up to 50 percent and open up air travel to millions of Americans who previously couldn't afford it.

The Department of Transportation became the industry watchdog, and airlines took control of themselves.

Both the DOT and the Air Transportation Association said deregulation has worked well.

"Over the last 20 years, prices have fallen, when you taken into account inflation, by about a third, and travel has doubled. We also expect to be moving somewhere in the neighborhood of a billion passengers within the next 10 years," said Transportation Secretary Rodney Slater.

"Over the last 20 years, prices have fallen, when you taken into account inflation, by about a third, and travel has doubled. We also expect to be moving somewhere in the neighborhood of a billion passengers within the next 10 years," said Transportation Secretary Rodney Slater.

Deregulation gave birth to the concepts of airport hubs and frequent flyer miles and led to the creation of new airlines, such as Southwest, Western Pacific and People Express. The latter two carriers aren't around any longer.

"There were ... some airlines that didn't make it, but the ones that did are strong and growing even stronger," Slater said.

A spokesman for the Air Carriers Association of America criticizes deregulation. "It's bad for the consumer and particularly bad for business people because business airfares have increased dramatically in the last two years," said Ed Faberman.

David Fuscus, of the Air Transport Association, disagrees.

"There's 600 million people a year traveling and the reason for that is the competitive nature of the industry, and I think the facts speak for themselves about how competitive the U.S. airline industry is," he said.

Based on a report from CNN's Business and Travel and Beyond. The segment appears weekdays on Early Edition at 7 AM (ET) and on Morning News at 10 AM (ET).