Friday 15 December 2017

No-one will be fired over passenger dragging incident, says United Airlines chief

HORROR in the cabin: Lawyers for Dr David Dao say the 69-year-old grandfather has become ‘a poster child’ for the mistreatment passengers suffer at the hands of the airline industry
HORROR in the cabin: Lawyers for Dr David Dao say the 69-year-old grandfather has become ‘a poster child’ for the mistreatment passengers suffer at the hands of the airline industry

David Koenig

The chief executive of United Airlines has said no-one will be fired over the dragging of a man off a plane - including himself.

Oscar Munoz said he takes full responsibility "for making this right" and promised more details later this month after United finishes a review of its policies on overbooked flights.

Company executives said it is too soon to know if the incident is hurting ticket sales.

United has been pummelled on social media - #BoycottUnited is a popular hashtag - and late-night television.

Through Tuesday afternoon, its shares had fallen 4.3 per cent since Flight 3411, wiping out nearly one billion dollars (€938 million) in market value, although several other airline stocks declined in the same period.

After the market closed on Monday, United reported a 96 million dollar (€89.46 million) first-quarter profit, down 69pc from a year earlier largely because of higher costs for fuel, labour and maintenance.

The revenue picture was looking better - evidence was growing that after two years of falling average fares, United will be able to push prices higher this year.

On a conference call to discuss those results, Mr Munoz started by apologising again for the April 9 scene on a United Express plane at Chicago's O'Hare Airport.

United Airlines CEO Oscar Munoz . (AP/Richard Drew)
United Airlines CEO Oscar Munoz . (AP/Richard Drew)

David Dao, a 69-year-old Kentucky doctor, was bloodied and dragged off the plane by Chicago airport officers who had been summoned by United employees when he would not give up his seat.

Mr Munoz and other executives vowed to treat customers with dignity, and said that what happened to Dr Dao will never happen again.

Mr Munoz's early statements on the incident were widely criticised.

He initially supported employees and blamed Dr Dao, calling him "disruptive and belligerent".

On Tuesday, he was asked if the company ever considered firing anyone, including management.

"I'm sure there was lots of conjecture about me personally," said Mr Munoz.

He noted that the board of United Continental Holdings has supported him.

"It was a system failure across various areas," Mr Munoz continued. "There was never a consideration for firing an employee."

Dr Dao's lawyers have taken steps that foreshadow a lawsuit against the airline and the city of Chicago, which operates O'Hare Airport.

United announced two rule changes last week, including saying that it will no longer call police to remove passengers from overbooked planes.

It is not clear whether United oversold Flight 3411, but the flight became overbooked when four Republic Airline employees showed up after passengers had boarded and demanded seats so they could commute to their next assignment, a United Express flight the next morning.

Some politicians and consumer advocates have called for a ban on overselling flights.

Mr Munoz declined to address that or other possible changes until the airline finishes a review by April 30.

Even in normal times, airlines closely - even daily - scrutinise numbers such as advance sales and occupancy levels on planes.

Yet United officials said they could not measure whether the dragging has affected their business.

"It's really too early for us to tell anything about bookings and in particular last week because it was the week before Easter, that's normally a very low booking period," said United president Scott Kirby.

He said that United's forecast for the April-June quarter has not changed.

Limited competition at many major airports could blunt any nascent boycott of United.

Wall Street analysts have been mostly silent about the Dao incident, perhaps believing that it will not have a noticeable impact on United profits.

They did not ask United management any questions about it on Tuesday's call.

Barclays analyst Brandon Oglenski told Mr Munoz that "accidents happen ... hopefully, we can put this behind us".

Back in December, the analyst had called United Continental the "most compelling stock" in the airline sector.

Mr Munoz said he has received "a lot of support" from United's high-end customers, although "obviously a lot of people have ideas and thoughts about how we can make things better".

Press Association

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