American Airlines sold the same seat at five prices

Deregulation in 1978 let anyone fly any route at any price, and by the early 1980s People Express was doing exactly that: no-frills fares undercutting the majors, filling planes American couldn't match without gutting its own full fares. A straight price war would have meant matching People Express seat-for-seat, at a loss American's cost structure couldn't sustain.

On 17 January 1985 American used its existing inventory-control systems to launch Ultimate Super Saver fares — priced at or below the low-cost carriers, restricted rather than open to the whole plane, full service kept intact. The heavier automation, DINAMO, was a longer project: American kept building out the underlying yield-management system through the decade, fully implementing it, by one account "after twenty-five years in the making," in 1988.

Ultimate Super Saver fares plus the DINAMO yield-management system: sell restricted seats early and cheap, protect flexible seats for late business demand.

Sold the same seat twice: restricted cheap fares for early leisure buyers, protected flexible seats for late business payers, letting each self-select.

Restrictions made cheap fares unattractive to business travelers, so customers self-selected into tiers.

The system held back seats for late full-fare demand, filling otherwise empty seats early.

Each seat category was priced against its own demand curve, undercutting discounters while keeping full fares.

If you sell a perishable fixed-capacity unit, segment it by willingness-to-pay proxies instead of choosing one price.

Robert Crandall credited yield management with roughly $500M a year; the unrestricted-discount competitor People Express collapsed in 1986.