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Case study Ineffective Customer Services United AirlineUnited shares slide as PR nightmare catches
up with investors
Published Tue, Apr 11 2017 3:15 PM EDTUpdated Tue, Apr 11 2017 4:09 PM EDT
Fred Imbert@foimbert
Lauren Thomas@laurenthomasx3
Key Points
Shares of United Continental slipped Tuesday.
The airline’s stock had climbed nearly 1 percent Monday, not reacting much initially
to the internet’s response to an ugly video of a passenger being dragged off an
overbooked flight.
Shares of United Continental fell by 2 percent Tuesday as outrage over Dr. David Dao of
Kentucky being dragged off an overbooked flight finally caught up to the stock. The shares
were among the worst performers in the S&P 500.
The airline’s stock, however, climbed nearly 1 percent Monday, not reacting much initially to
the internet’s response.
Videos of the incident went viral on social media and prompted CEO Oscar Munoz to
apologize for having to “re-accommodate ” customers after a two-hour delay. The
confrontation happened on a United Express flight operated by Republic Airways.
Munoz issued a second apology Tuesday afternoon in which he said the company “will fix
this.” “It’s never too late to do the right thing. I have committed to our customers and our
employees that we are going to fix what’s broken so this never happens again,” he said. The
company’s stock traded off the lows of the day amid the second Munoz apology.
Overnight, though, even more graphic videos showing Dao being dragged off the flight,
covered in blood, triggered further outrage on social media on China.
Although the doctor’s identification as ethnic Chinese has not be confirmed, the top trending
topic on Tuesday on microblog Weibo, China’s take on Twitter, was
#UnitedAirlinesforcespassengeroffplane.
“This went to the next level when the CEO and the [United] executives began to respond,”
said Andy Swan of LikeFolio, which monitors social media for financial applications. “They
threw gasoline on a fire.”
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