The 2017 Annual “Stupid Company" Award: United Wins!

A friend of mine, a long time United passenger, is dropping his United Airlines credit card. He can’t deal with a company that treats its passengers so badly.

He is not talking about the normal indifference of the United airline crew to its passengers. He is not talking about the new fees on baggage handling or changing your ticket.

He is talking about how United manhandled and dragged their 69-year-old Vietnamese-American customer, Dr. David Dao, off the plane on Sunday, April 9, 2017. It was so crucial to get four United employees on the plane that United violently dragged off an American physician who resisted. Dr. Dao had bought an honest ticket to fly United from Chicago to Louisville. The video shows him screaming then bleeding with all the surrounding passengers in a state of disbelief and anger.

The cost to Dr. Dao: two broken front teeth, a broken nose, a concussion, and sinus problems that may require reconstructive surgery.

The cost to United Airlines: A video of the manhandled Dr. Dao circulating around the world. Millions of Asians are seeing this as a racist incident from the airline that does the most foreign business in Asia. United’s stock price dipped by 3 percent on the morning of Tuesday, April 11, reducing the company’s market value by almost $1 billion.

And what did United’s CEO Oscar Munoz have to say? He initially apologized for the incident but accused Dao of being “defiant and belligerent.” He described the event as “upsetting” and apologized for “having to re-accommodate these customers.”

It took another two days before Munoz offered a more emphatic message saying, “No one should ever be mistreated this way.” Munoz promised to review United’s policies so that this would never happen again. He said that all the passengers on the flight would get a refund. United claimed that Munoz called Dr. Dao numerous times to apologize but Dr. Dao’s lawyer said that Dr. Dao nor his family ever received a call.

But this one incident is part of a larger picture of how many companies and CEOs are blinded by their power and ready to use authoritarian measures to manage their business in the pursuit of shareholder value,” ready to place less value on human values and concerns.

Many airlines overbook their passengers by 5 percent. Last year, United forced 3,765 people off oversold flights and another 62,895 United passengers volunteered to give up their seats, probably in exchange for travel vouchers.

The airlines normally do their best to get volunteers to give up their flight before anyone boards the plane. The airline doesn’t want to ask for volunteers after people are already in their seats.

United had selected Dr. Dao and three other passengers at random for removal to turn over their seats to United employees needing to reach other destinations. United had unsuccessfully offered $1000 in travel vouchers and a hotel stay if enough passengers on that flight would give up their seats.

I don’t know how United chose Dr. Dao. The airline says that it uses a random system. But maybe they saw Dr. Dao as a single person and believed that an Asian would be more disposed to comply than an American. Maybe his record showed that he rarely flies on United and therefore yields the least revenue to United. But to call in police to drag him out by any means possible shows very poor discipline in the part of United airline. Dr. Dao is not a terrorist, he is one of your customers!

Dao’s family hired attorney Thomas Demetrio to sue United. The lawyer accused the airline industry of having “bullied” its customers for far too long. He accused United for “a culture of disrespect.” “Are we going to continue to be treated like cattle?” he asked. “I hope he (Dr. Dao) becomes a poster child for all of us. Someone’s got to.”

What Should United Do to Restore Its Image?

United could ask its CEO, Oscar Munoz, to step down - on the grounds that he failed to have a good system for paying people enough to voluntarily give up their seats. The Dr. Dao incident never should have happened. If United’s CEO was Japanese, he probably would have resigned under shame.

Short of resigning, on the grounds that Munoz has been very valuable to the airline, perhaps the Board should penalize his pay. Or he should voluntarily take a pay cut.

The next need is for CEO Munoz to deliver a much more sincere apology that comes from the heart. Instead, Munoz delivered over the next few days half-hearted statements until a real one finally came out.

There’s another stunning irony here – PRWeek named Munoz their Communicator of the Year 2017 just last month.

Perhaps the head of United’s PR department ought to be fired for failing to help CEO Munoz make a sincere apology. The CEO’s public statement should include a whole new policy on how United will offer money to overbooked passengers and never use force to persuade some people to give up their seats ‘in an overbooked situation.’

The airline must rethink its position on dealing with irate customers. Can it really justify a violent police response? Or are there other ways to defuse such disagreements? They should look at other countries – and see how situations such as this might be handled by discussion, not violence. British police, for example, are expected to use force only as a last resort.

Next, United should survey its own customers to ask how they feel about United’s service and policies. United will undoubtedly learn a lot and hopefully introduce needed improvements.

United should strive for more. It should make its ambition to be the best airline in the world. This is no different than when Ross Perot decided to leave the General Motors Board of Directors because they wouldn’t aim to make General Motors the best automobile company in the world.

Dark clouds ahead.

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