Rick Zeni, until recently the Chief Information Officer at Frontier Airlines, produced a series of videos on revenue management while in residence at The New York University Stern School of Management.Airline pricing, or more correctly, revenue management, is one of the more sophisticated applications of the theory of price discrimination in business.Find the videos at https://sites.google.com/a/nyu.edu/rickzenirmvideos/home.Click on Introduction to Revenue Management and view the first 4 videos.The duration is about 40 minutes.

Question

Why was American Airlines unable to earn a profit by charging a single price after the CAB allowed competition from charter airlines in the 1970s?