In Chicago the other evening, after all passengers were seated on an American Airlines flight to National Airport, a stewardess' voice came over the speaker system: ''Sorry to be the bearer of bad news, ladies and gentlemen, but we have an equipment malfunction, and we won't know for 30 minutes whether this flight will go.''

There wasn't a passenger on that flight who didn't observe that the news of the potential cancellation had been delayed until all were aboard -- when it was too late to catch a United Airlines flight due to take off for Washington at about the same time.

And how many times have you called an airline to book a flight at an advertised bargain price to be told: ''Sorry, there were just a limited number of seats available at that price, but we can let you have . . .''

''When you deal in goods, that would be called 'bait-and-switch' advertising under the antitrust laws,'' said University of Denver transportation-law expert Paul Stephen Dempsey. ''But under deregulation, the airlines get away with it.''

It has been apparent to many for some time that the effect of airline deregulation is to let the industry drift into the dominance of a handful of companies, each ruling the roost out of a regional ''hub.''

Deregulation in fact has been a disaster, as is now belatedly recognized by The Wall Street Journal, which Monday featured a detailed story headed: ''An Unexpected Result of Airline Decontrol Is Return to Monopolies.'' The subheads told the rest of the story: ''Big Carriers Are Dominating Nation's Hub Airports; Legislators Are Concerned -- Higher Fares and Less Service.''

As stronger carriers gobbled up competitors through bankruptcies and mergers, a handful of giants has emerged: if you are in Minneapolis or Milwaukee, you have little choice except to fly Northwest. In St. Louis, Trans World Airlines is kingpin, with 317 departures compared with 22 for its nearest rival, Southwest Airlines. In Dallas, it's American Airlines. In Pittsburgh, it's USAir, and so on. According to Dempsey, Texas Air, United, Delta, American, TWA and Northwest control more than 84 percent of passenger traffic, up from 73 percent before deregulation.

Moreover, 148 small cities now have assurance of some airline service with the help of federal subsidies, provided in a 10-year phase-out period under the 1978 deregulation act. That will come to an abrupt end next year. Dempsey said in an interview that his guess is that 100 of those towns will soon have no air service at all. (As it is, most small cities under deregulation are served by commuter lines, whose safety record is inferior to that of the regular lines.)

Experts such as Dempsey, the late Civil Aeronautics Board chairman Secor Browne and Frederick Thayer of the University of Pittsburgh, among others, years ago predicted airline deregulation would degenerate into an airline oligopoly.

But Congress and the Carter and Reagan administrations instead listened to the siren song of deregulators, led by Alfred Kahn, Carter's CAB chairman. They promised that the ''free market'' under deregulation would stimulate competition, thus work to the benefit of consumers.

Back in 1983, David B. Richards of the CAB staff warned Congress that the short-term benefits of fare wars accompanying the early years of deregulation were disguising the potential longer term problems. But few paid attention.

Without the government looking over their shoulders, airlines have been free to abandon unprofitable routes, without regard to the impact on the local populace or industries; manipulate fares up and down to attract business; use cutthroat competition -- or unfair pricing -- to force competitors to the wall. There really is no mystery about it: deregulation had had the same effect on the railroads and the trucking industry.

Even without regulation, the Department of Transportation still has authority to provide some consumer protection. But Secretary Elizabeth Dole seems to have little inclination to do so. In addition to the bait-and-switch advertising mentioned by Dempsey, the airlines engage in deliberate overbooking of seats and in what Dempsey calls ''unrealistic scheduling'' -- that is, they send out more flights than the nation's airports can handle.

The safety hazard from deliberately overcrowding the airways is obvious. Usually, the carriers lay the blame for delays on the unseen and much-maligned air-traffic controllers. But as the captain of a recent Eastern Airlines shuttle said as he zoomed up to the New York area from Washington, only to be held in a pattern near LaGuardia Airport, ''We're going to be stuck here for at least a half-hour. That's deregulation for you, folks!''

The time has come to reexamine Alfred Kahn's grand experiment. Deregulation does not work: airlines, like other forms of transportation, require economic regulation. To believe otherwise is to ignore reality. Airline service has gone to hell, and ticket prices are going up!