Despite passenger-dragging nightmare, United execs are upbeat about airline's prospects
- Author: Zachary Reyes Apr 23, 2017,
Apr 23, 2017, 12:49
The tone-deaf airline CEO changed his tune and apologised profusely when he started to see the intensity of the public reaction and the very real effects of this spectacular mismanagement of a single client already seated for departure. During the incident with Dr. Dao, the airline boarded the flight-the last on that Sunday night to Louisville-but then asked for volunteers to exit and be rebooked when it needed four seats to re-position four crew members for assignment.
Three officers have been placed on administrative leave while the incident is investigated.
He said it was too soon to say if the leisure travelers were staying away from United in the wake of the incident. Through Tuesday, its shares have fallen 4.4 per cent since Flight 3411, wiping out almost $1 billion in market value, although some other airline stocks also declined in the same period. And as Munoz has repeatedly done in recent days, he apologized to customers and said he took full responsibility for what happened on Flight 3411, including the forcible eviction of David Dao.
Shares of United Continental Holdings Inc (UAL.N) were down 4.12 percent in afternoon trading, despite earnings that outperformed analyst expectations on several key metrics.
There was "never consideration" of firing an employee over the incident, he said.
The video of a passenger being forcibly removed from an overbooked flight has been watched by millions. Other airline stocks also declined in the same period.
Rather, Munoz blamed "a system failure across various areas" for contributing to the circumstances that led security officers to drag the passenger off United flight 3411 when he refused to give up his seat, leaving the man, a doctor, bloodied and injured.
And some United States politicians have called for a total ban on overselling flights.
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's the week before Easter". Our forecast for the (April-through-June) quarter didn't change at all.
Limited competition at many major airports could blunt any nascent boycott of United.
United is engaged in a sweeping review of its policies with the aim of creating what Munoz calls a more "common-sense approach to doing things". Instead, United's lower profits are likely because of a 28.1% increase in fuel costs and a 6.9% increase in labor costs.