Markets shrug off United Airline's PR setback
Due to an overbooked flight, United Airlines passenger David Dao was forcibly removed off of a plane on April 9 by Chicago authorities, resulting in several injuries to the passenger.
Flight 3411 needed four seats for crew members and randomly selected four passengers to make space for them. Three of those selected agreed to leave the flight, but Dao refused to leave the flight, saying he was a doctor and had several patients waiting for him in Kentucky.
He was offered an $800 voucher, but after declining, Chicago authorities decided to remove him by force. In several videos recorded by other passengers, Dao can be seen being dragged out of his seat, screaming and bleeding from several parts of his face.
After the video went viral, the company’s CEO Oscar Munoz sent an e-mail to employees, stating there was a need to “re-accommodate” passengers and claimed Dao had been disruptive and belligerent, according to CNN. However, he later said he had not blamed Dao and took full responsibility for the company’s actions.
“I continue to be disturbed by what happened,” Munoz said. “I deeply apologize to the customer forcibly removed and to all the customers aboard. No one should ever be mistreated this way.”
In response to the incident, a United Airlines spokesperson said all customers on the flight will get compensation for their tickets and, according to one customer who later told CNN, said the airline would give vouchers worth $800 if they “release” the airline from lawsuits. The company’s spokesperson later said there was no intention behind using the word “release” in the e-mail.
Dao’s lawyer, Thomas Demetrio, said he is planning to sue United and those who were responsible for the injuries his client had suffered, as both the company and the authorities mishandled the situation. Dao suffered a concussion, two missing teeth, a broken nose and injuries to his sinuses and will need reconstructive surgery.
The company’s stock price took a hit as a result of the recent string of events. Shares plunged by as much as 7 percent in after-hours and early morning trading following the incident, but recovered later in the week, closing at $69.08 heading into the holiday weekend. According to “Fortune,” Wall Street analysts have said that the recent incident is unlikely to cause any long term damage for the company and that they will recover from any loss.
“Overall, we think demand for [United Airlines] flights are unlikely to be affected by this poor customer service incident,” said Jim Corridore, an analyst at the Center for Financial Research and Analysis.
United Airlines has had other controversial issues of handling overbooked flight in the past and has also been accused of being a sexist company after they refused to let a woman board the plane because she was wearing leggings. The company responded by claiming they had the right to refuse someone from boarding the plane if they were not dressed “properly.”
The recent incident with Dao has caused a lot of rage among the public. Subsequently, the U.S. Department of Transportation will be investigating these events. Rather than being able to “fly the friendly skies,” Dao was met with a very unfriendly staff.