They were profitable because the CAB asked airlines how much it cost to run their business and then worked backward from whatever they said to arrive at the fixed fares for routes. While this is great if you want to build an airline with a giant internal bureaucracy, its not great for people who just want to get from point A to point B.
The members of the CAB were all political appointments and generally did not act for good of the consumer. When Louis Hector was appointed to CAB he insisted that air service be instated to his parent's home town of Carinda, Iowa (as a joke). No one on the commission had any objections.
Incidentally, if you are looking for a good read on the history of the US airline industry from the early days of flying mail routes until the mid 90s the book 'Hard Landings' by Thomas Petzinger is really great.
The members of the CAB were all political appointments and generally did not act for good of the consumer. When Louis Hector was appointed to CAB he insisted that air service be instated to his parent's home town of Carinda, Iowa (as a joke). No one on the commission had any objections.
Incidentally, if you are looking for a good read on the history of the US airline industry from the early days of flying mail routes until the mid 90s the book 'Hard Landings' by Thomas Petzinger is really great.