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Youngstown-Warren Regional Airport (YNG) had been trying to secure daily service from a major carrier for a number of years. Last year United Airlines announced that they were dropping plans to establish a daily route from Youngstown to Chicago (you can read the story hear if interested: https://goo.gl/vRNn1d). This is despite the fact that the airport was able to guarantee United approximately $1.75 million in annual revenue. Suppose United estimated that their costs to operate daily service from YNG would equal $1 million per year, which would have given them an estimated annual accounting profit from YNG equal to $750,000. Briefly explain why United might not be willing to offer daily service from YNG, even if they knew they would have had a guaranteed profit equal to $750,000.
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