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United to pay oversold fliers up to $10,000, after dragging furore

LiveMint logoLiveMint 27-04-2017 Michael Sasso

Atlanta: United Continental Holdings Inc. will offer as much as $10,000 to passengers who voluntarily give up their seats on oversold flights, one of 10 changes the airline is adopting after a customer was dragged off a plane by security officers.

The carrier will also reduce the overbooking of flights and refrain from calling in law enforcement officials unless safety and security are at risk, according to a company statement on Thursday. United issued the changes more than two weeks after the forcible removal of David Dao, a 69-year-old passenger who refused to surrender his seat, by Chicago Department of Aviation officials.

Rigid policies for handling cases where passengers must be denied boarding “got in the way of our values,” United chief executive officer Oscar Munoz said in the statement. The airline is still dealing with brand damage and other fallout from the 9 April incident, and faced another round of negative headlines on Wednesday when a giant rabbit died as it awaited a connecting flight after arriving in Chicago from London on United.

The company said it’s striving to become a “better, more customer-focused airline” to win back the public’s trust after a worldwide furor over Dao’s treatment and calls from some politicians to crack down on the industry with tougher rules and legislation.

“Every customer deserves to be treated with the highest levels of service and the deepest sense of dignity and respect,” Munoz said. “Two weeks ago, we failed to meet that standard and we profoundly apologize.”

The United board cancelled Munoz’s expected 2018 elevation to chairman and tied compensation more closely to customer service last week.

Senate deadline

Along with the statement on policy changes after Dao’s mistreatment, the Chicago-based airline also released a timeline of what happened before and during the dragging—thereby meeting a deadline for providing an account of its actions to a US Senate committee probing the matter. Dao suffered a concussion, broken nose and two lost teeth in the incident, according to his attorney.

The airline said it needed to remove four seated passengers from the flight to make room for crew members flying to Louisville, Kentucky. Dao and his wife were among those randomly selected.

After Dao refused to surrender his seat, another passenger came forward and offered to leave the plane in exchange for $1,000, United said. The airline turned down the offer because it needed two volunteers to avoid removing the Daos. No one else was willing to leave the plane without a guaranteed arrival in Louisville that same night—something United couldn’t promise because of maintenance problems on another Louisville-bound flight.

Policy changes

The company’s 10 policy changes are being rolled out this year, with some already in place. The $10,000 maximum payout goes into effect on Thursday. Until now, gate agents were only allowed to offer passengers as much as $500, while managers could go as high as $1,350.

In raising potential payouts, United followed the lead of Delta Air Lines Inc., which earlier this month said it pay as much as $9,950 compared with a previous cap of $1,350.

Additionally, United will refrain from demanding that seated customers surrender their spots involuntarily, unless safety or security is at risk. The company is planning a new automated system to solicit volunteers willing to give up their places on overbooked flights. Other measures are designed to give employees more training and power to deal with difficult situations.

By June, United expects to have a team in place to help gate agents find ways to use nearby airports, other airlines and ground transportation to get passengers and crews to their destinations.

“The changes we have announced are designed to better serve our customers and empower our employees,” the airline said. “This is how we begin to earn back your trust.” Bloomberg

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