This seems like a question that really challenges your common sense and forces you instead to utilize only logic.
First things first, I am reading the prompt as implying that prior to deregulation, airlines were prohibited from flying on only their most profitable flights. They had to fly on some less profitable routes. This is because the term "by allowing" seems to be a causative statement essentially saying that because of the deregulation (cause), airlines no longer have to fly on less profitable routes (effect).
I am on the fence about this though. Isn't it possible for a new set of rules to give you at least some of the same allowances as the previous set of rules? If this is the case, then even when air travel was regulated, the companies many have been allowed to restrict travel only to their most profitable routes, and this allowance was carried over as a result of deregulation.
Assuming that Scenario 1 is the case, that prior to deregulation were in fact required to fly on less profitable routes, then this is where I see common sense challenged in favor of cold logic. Just because the law says something doesn't mean that the airlines will follow it. Obviously, this would never happen in the United States. But the prompt doesn't say what country the airlines are in. Maybe it's in Somalia or a made up country where the government has even less authority on matters such as air traffic. If that's the case, there may be regulations on the book that airlines can very easily get away with ignoring. From seen through this perspective, it's very easy now to imagine, in fact almost impossible not to, how there can be alternative motives to maintaining less profitable routes prior to deregulation. And for whatever reasons, the disappearance of these motives coincided with deregulation.
Scenario 2 is less convoluted, but again I am getting the impression that it isn't the case. If the airlines were already allowed to fly only on their most profitable routes to begin with, then clearly government requirements were not a motivating factor.
Please advise