Following the outrageous incident earlier this month, which has resulted in serious injury to passenger David Dao, 69, CEO of United Airlines (United Continential Holdings Inc. (NYSE: UAL)), Oscar Munoz, initially tried to justify the violent removal of the passenger referring ‘’Dao’’ as argumentative and disruptive since he refused to get off the airplane when the crew requested it. Therefore, the incident was put under further investigations.
Roughly two weeks after the incident, a new report published on the Washington Post indicates that United Airlines took full responsibility of the subject matter acknowledging that several mistakes were made before and during the incident causing everything to go wrong that day.
As a very well-known Airline, it is important to investigate such a big incident that can off course be costly to the company’s image and finances; however, in attempt to keep some type of credibility, the CEO should have at least deliver an initial apology to the victim, his family and his fellow customers instead of trying to justify the crew’s actions and blaming Dao’s refusal of removal at first sight.
Under the airline’s new customer-first policy, released last Thursday, April 20th, any customers who are willing to give up their seats on a similar situation will be offered incentives like up to $10k in travel certificates for future flights or in case of urgent travel, they will even try to book the passenger with another airline or drive them to a nearby airport at no cost. The policy also forbids other passengers to film incidents without their consent.
By not allowing other passengers to film if there were a similar incident is basically lowering their transparency in a certain way, but at the same time, it protects the victim’s right to privacy. The new resolution sounds meaningful in the concept of avoiding a similar situation in the future, and in the objective of providing adequate training to the company’s crew. However, a mass group of faithful customers were deceived and they decided to no longer be United Airline’s customers. For example, there is a trending photo on Twitter featuring a group of people protesting the airline and this will eventually create a negative stereotype for the company and destroy their image.
This type of protest can seem insignificant until the sale rates of the company goes down which can force them to lower their prices. Apparently, the issues barely had any impact on the airline’s stocks, that only went down on April 11th. Yet, there is no guarantee that it will not drop in the near future due to collateral damage to their customer’s trust. Furthermore, the actual financial consequences are yet to be known until United regains their customers’ trust; and this is not going to happen overnight by changing a policy.