You are using an older browser version. Please use a supported version for the best MSN experience.

Behind United Airlines' Fateful Decision to Call Police

The Wall Street Journal. logo The Wall Street Journal. 4/17/2017 Susan Carey

UP NEXT
UP NEXT
The recipe for the disastrous decision by United Airlines’ employees to call for police to remove a passenger from a fully booked flight was years in the making.

Like most other airlines, United Continental Holdings Inc. follows strict rules on every aspect of handling its passengers, from how to care for unaccompanied minors to whether someone gets a whole can of Coke.

While procedures change to keep up with evolving safety and security protocols, streamlining the underlying bureaucracy can be a lower priority for an operations-focused carrier such as United, experts said.

Deviating from the rules is frowned upon; employees can face termination for a foul-up, according to people familiar with the matter.

At United, this has helped create a rules-based culture where its 85,000 employees are reluctant to make choices not in the “book,” according to former airline executives, current employees and people close to United.

Airlines crave consistency, experts said, and United isn’t unique in its strict focus on rules. For carriers—which face government scrutiny on everything from pilot training to repairs—the tomes of rule books can help ensure safety protocols are followed.

The company “follows manuals,” said a longtime United pilot at the nation’s third-largest carrier by traffic, where he said the rule-based culture was reinforced by the merger with Continental Airlines seven years ago.

The incident at United last week, in which Chicago Department of Aviation police dragged a screaming passenger, David Dao, down the aisle and off a United Express regional flight, started as a mere scheduling issue. United declined to comment on the incident, pending its investigation.

People close to the company said it could have been avoided. At least some decisions that led to the crisis were fueled by employees following rules, which are endemic to big, long-lived airlines and amount to giant manuals.

As United prepares to report first-quarter earnings on Monday, it isn’t clear how much the reputational hit will cost the company. Investors so far haven’t punished United’s stock—shares ended last week 2% lower—but it isn’t clear yet what impact the fracas will have on the carrier’s bookings or new employee training costs.

Fliers have vowed on social media to boycott the airline, which transported 143 million passengers last year and was seeing big improvement operationally after a few sluggish years. Many customers on social media and in the press have called on Chief Executive Oscar Munoz to resign.

The incident has also turned into an indictment of the overall treatment airlines provide their increasingly dissatisfied customers. The U.S. industry, which has consolidated into a virtual oligopoly where the four largest carriers control more than 80% of domestic seats, has taken away perks like free checked luggage, crammed more seats into economy-class cabins and made frequent-flier programs less rewarding, all to improve the bottom line.

© Patrick Gorski/Zuma Press

United has lagged behind its rivals for years in financial and operating performance. The messy merger in 2010 with Continental Airlines further hurt its focus on customer service because the new company was busy aligning its information technology systems, working to win federal safety regulators’ approval for new procedures and manuals to cover the combined entity and producing new labor contracts to cover its mostly unionized workforce.

Last Sunday evening, Republic Airways Holdings Inc., the regional airline operating the flight for United, asked an hour before departure for four of its crew members to take the place of passengers, according to a person familiar with the matter. The crew was needed the next day at the flight’s destination in Louisville, Ky., the person said. They had been delayed by a mechanical problem earlier. United agreed, according to two people with knowledge of the matter.

But the two pilots and two flight attendants didn’t arrive at the gate until a few minutes before departure, according to United’s pilots union. All the passengers were already seated.

United’s gate agents went on board to offer compensation to customers who would agree to fly later, a negotiation that normally takes place at the gate. There are rules for this process, known as “denied boarding.” No one took their top offer, $800 plus a hotel voucher.

Instead of offering more, agents used a computer program, as dictated by the rules, to pick fliers of the least value to the airline based on factors like ticket price paid and frequent-flier status, according to people familiar with the matter.

Three obliged, but Dr. Dao, who was flying with his wife on a trip from California, refused. So the agents, following the rules, called for law enforcement.

In hindsight, the gate agent should have said, “Folks, we’re not leaving until someone gets off. If someone doesn’t take the $800, we’re going to cancel the flight,” said the United pilot, who wasn’t involved in the incident.

But canceling the flight would have been a drastic step, according to the rule books. Seventy passengers would be stranded and require compensation and new flight arrangements the next day. The extra crew wouldn’t have made it to Louisville, causing the flight the next morning to be canceled as well. People close to United said the rules-based calculus is to inconvenience the fewest number of fliers.

“Employees followed the policy,” said a person familiar with United’s executive suite. But questions remain about why the agents didn’t raise the compensation level last Sunday, which is part of United’s review expected by the end of the month. United declined to comment on the compensation decision. Last week, it said it will refund the fares of all the passengers on that plane, Flight 3411.

It also isn’t clear when United executives, who sit in the 11th floor of the Willis Tower in downtown Chicago, learned of the incident.

By Monday morning, after videos taken by passengers on the plane had spread rapidly on social media, United was on the defensive. Botched attempts by Mr. Munoz, the CEO, to explain the events appeared to make things worse.

“Part of what happened is there were too many cooks in the kitchen,” one knowledgeable person said of the company’s initial responses.

Mr. Munoz first tweeted apologies at midday Monday for “having to re-accommodate those customers.”

On Tuesday, in a change of tone, Mr. Munoz called it “a horrific event.”

On Wednesday morning, in an interview with ABC, he called the event a “system failure” and said United hasn’t provided its front-line managers and supervisors with “the proper tools, policies, procedures that allow them to use their common sense.”

“That’s on me,“ he said. ”I have to fix that.”

Decades-old union conventions that enshrine seniority over performance are part of the problem, one former executive said, because employees are rewarded for their tenure rather than their talent.

Another former airline executive said he believes Mr. Munoz, “didn’t realize how rule-based the employees are. The huge rule books need to be burned because crazy shit happens,” the executive said.

United said no employees have been put on leave or terminated in connection with the incident, and it isn’t aware of any dismissals at Republic Airways, which has declined all comment. The three law-enforcement officials employed by the Chicago Department of Aviation have been put on leave pending an investigation.

Mr.  Munoz, who is facing his biggest challenge as the head of United, has pledged to review the company’s policies for moving flight crews, incentivizing volunteers to yield their seats on sold-out planes and relations with airport authorities and law enforcement. Mr. Munoz also said United will change its former policy of asking law enforcement officers to remove passengers from its flights—unless it is a matter of safety and security.

Robert Milton, nonexecutive chairman of United and a former CEO of Air Canada, said in an interview that Mr. Munoz has the complete backing of the 15-member board, something he reiterated Friday in a memo to employees.

But Mr. Milton added that Dr. Dao’s mistreatment and United’s flat-footed reaction must become “a defining moment in the history of United Airlines pivoting to customer service and customer delivery.”

AdChoices
AdChoices

More from The Wall Street Journal

The Wall Street Journal.
The Wall Street Journal.
image beaconimage beaconimage beacon