United pays heavy price for customer carelessness

From: Financial Times

His injuries are horrific: concussion, broken nose and two lost teeth. The assault, which left David Dao bloodied, has been seen by millions. Yet what is really shocking is that Dr Dao, who had paid for his ticket, was attacked by people called in by the airline he was travelling with: he was one of its customers.

Aggrieved travellers from around the world have seized on the brutal treatment of the 69-year-old Vietnamese-American doctor as a symbol of all that is wrong with air travel today, from cramped legroom to carry-on fees.

Dr Dao suffered his injuries at the hands of airport police in Chicago as they forcibly removed him from an overbooked United Continental flight. But by the end of the week, he had emerged as an Everyman figure in a broader corporate morality play about how companies should treat their customers — and what they should say and do when things go badly wrong.

United, for its part, has been widely cast as an example of corporate heartlessness and indifference, issuing tone-deaf statements that deflected legal blame while doing little to prevent brand damage, at first, and then resorting to ever more abject apologies that still failed to assuage public anger. Industry analysts say the US airline may be lucky to avoid even more serious reputational damage.

“It took the cork out of the bottle of anger at airlines for an increasingly aggravating experience when travelling,” says Allan Adamson, founder of BrandSimple, a branding consultancy. Within hours, passengers were complaining about everything from United seating a toddler between two strangers instead of with their parents, to restrictions on carry-on bags, and the cost of bottled water on discount carriers.

A subplot of racism thrown into the mix — with some social media users questioning whether Dr Dao was mistreated because he was Asian — added to the sense that the whole affair was about much more than just an overbooked flight, a public relations crisis, or even the airline industry.

Offence was registered as far away as China, one of the world’s fastest growing major airline markets, and a critical area of expansion for United. Video of the fracas, taken by passengers who can be heard exclaiming in horror as it unfolds, became the top trending item on Sina Weibo, the Chinese equivalent of Twitter (partly because the doctor was initially misidentified as Chinese).

Dr Dao’s lawyers further stoked emotions when they quoted him as comparing the experience to his escape from Vietnam during the Fall of Saigon in 1975. Being dragged down the aisle was, his lawyer quoted him as saying, “more horrifying and harrowing than what he experienced on leaving Vietnam”.

The lawyer went on to tell a press conference that he hoped Dr Dao, who is preparing legal action against United, would spearhead a consumer revolt against corporate mistreatment of customers — not just on flights but at rental car counters, in grocery stores, and even at the doctor’s office. He said that airlines routinely “bully” passengers.

Last Sunday started as just another typical day in America’s airports, where tens of thousands of passengers are involuntarily bumped off aircraft every year, according to federal statistics. Flight 3411 from Chicago to Louisville was full and ready to take off. But United needed four extra seats on the flight to transport staff to crew an aircraft in another city. Compensation was offered but no one gave up their seat. Four passengers were chosen at random; three stepped off the aircraft but Dr Dao refused. Airport police were called, tempers rose and then snapped. The rest will forever be history — on Twitter.

Crisis communications experts immediately began dissecting the cadaver of United’s inept public relations response: for nearly 24 hours the carrier seemed blind to the fact that it had any responsibility for what had happened, referring questions to law enforcement — doubtless on the advice of its lawyers.
“In crisis communications the legal team has always had a really heavy hand. But no matter what the settlement would have been with this gentleman, it would be a bargain given the hit they are taking to their brand equity,” says Chris Allieri, founder of Mulberry and Astor, a PR consultancy.

Late on day two, Oscar Munoz, chief executive, made a much mocked first stab at a mea culpa: apologising only for “re-accommodating” passengers — not for having one dragged down the aisle with blood dripping from his mouth. That night he reassured staff, in an internal memo, that they had followed procedure. But the digital outrage quickly exploded with United Airlines mentioned nearly 3m times on Facebook, Twitter and Instagram in the first 48 hours after news of the incident broke, according to Brandwatch, a social media analytics company.

Hashtags proliferated, including #BoycottUnited, #NewUnitedAirlinesMottos and #FlyTheFriendlySkies, mocking United’s advertising slogan. By Wednesday, 71 per cent of online mentions of United expressed a negative sentiment, compared with a 91 per cent positive reading on Sunday, Brandwatch analysis found.

It was only three days after the flight that Mr Munoz appeared on Good Morning America, the widely watched US television programme, to say “this will never happen again on a United Airlines flight”, adding “we’re not going to put a law enforcement official [on an aircraft] to take them off. To remove a booked, paid, seating passenger? We can’t do that.” He felt “shame and embarrassment” at the way Dr Dao was treated, he added.

United offered to reimburse everyone on the flight the cost of their ticket. But all this was condemned as “too little, too late” by those who advise companies on how not to get into a mess like this in the first place.

Hindsight often plays a role in these condemnations, but even seasoned online reputation consultants were surprised by how quickly the vitriol spread: “This is what I have done for a living for over a decade and I could not have predicted this. There’s a ferocity and velocity to this response that was not predictable,” says Michael Fertik, founder of Reputation.com, an online reputation management company.


Investors appeared taken off guard too, with United’s share price showing little impact on the first day after the crisis broke. The shares dipped sharply on Tuesday — at one stage wiping $1bn off its market value — but by the end of the week its share price had recovered much of its value. On Thursday Jim Corridore, airline analyst at CFRA, reiterated his strong buy recommendation on the airline. “With United finally saying the right things, we think that this situation can start to recede and allow investors to focus on industry fundamentals, which are quite good.”

Part of that can probably be explained by the fact that Mr Munoz, a well-liked figure who attracted public sympathy when he underwent a heart transplant weeks after taking over the struggling carrier, has been credited for having done much to put the company on a path to recovery.

United, which has struggled to deliver the operational performance and profits demanded by Wall Street since its merger with Continental Airlines in 2010, was the fourth-largest US carrier by passenger volume last year. Under Mr Munoz its share price has risen from a low of $37.75 last year to $69.07 on Thursday.

Mr Munoz also struck joint labour contracts with flight attendants and mechanics, a crucial step in integrating United with Continental and one that analysts hope will improve operating performance.

Ironically, he was even awarded PR Week’s “communicator of the year” award exactly a month before the incident. “Since taking on CEO duties in September 2015, Munoz has transformed the fortunes of the airline, galvanised staff, and set the business on a smoother course — all in the context of a tremendously difficult time personally,” the publication said, applauding him for being a sure touch on the shop floor and understanding “the value of communication”.

Soon after that, matters started to unravel, when the carrier faced a public backlash for refusing to allow two female passengers to board wearing leggings because they carried passes issued to family of staff that specify a strict dress code. Then came flight 3411, flashing pictures of a bloodied and dazed Dr Dao on millions of mobile phone screens around the world. Politicians weighed in, calling for an investigation. Even President Donald Trump commented.

United is scarcely the first company to have faced a ferocious social media firestorm. Just last week Pepsi was forced to withdraw an advert because of criticism on social media that it was racially and politically insensitive.

But Mr Fertik says of the United incident: “I think this one has legs. The next wave could come because there’s enough sustained interest now that Congress could have hearings, ask former customers about their bad experiences, bring in former employees.”

Still, many airline analysts doubt that disgruntled passengers will put their brand loyalty ahead of their wallets, and boycott United.

“How long will this last? Until the next airfare sale,” says George Hamlin, veteran airline industry consultant.

He is betting that digital outrage will be as quick to dissipate as it was to flare up in the first place, especially in a world where airline consolidation has left many passengers with few choices of how to get from A to B, cheaply, comfortably, and most of all in one piece.

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