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"A picture is worth a thousand words" as the old saying goes. And a picture in the media is worth a million words...and billions of dollars!".
Yes, I'm taking about the United Airlines scandal, as one customer being beaten and dragged off a plane went viral and destroyed a billion-dollar brand.
A few details to flash back the story. Soon after the passengers boarded the flight, United Airlines announced that four of them would have to give up their seats to make room for United employees commuting to work a flight out of Louisville. After the offer was raised to $800, and nobody was willing to leave the flight (perhaps because it would require missing a full day's work without a compelling excuse), somebody from United announced that a computer would randomly select four people to leave the plane. When the man in the video, a doctor, was selected, he refused to leave his seat, saying he had to see patients the following morning. United called officers to the scene. The rest is now a matter of digital record.
This incident created an online hurricane, which only intensified after United published a mealy-mouthed statement on Monday morning that seemed to blame the bruised customer and apologized only for “the overbooking situation.” After several hours, punctuating the sordid event with the least human-sounding statement in crisis-PR history, United CEO Oscar Munoz apologized "for having to re-accommodate” customers, as if the brutalized passenger had merely been asked to switch from an aisle seat.
The chart below shows United's market capitalization over the last five days. Market cap is a generally accepted way to value companies based on stock price.
At its trading low Tuesday, shares were down $3.16, or 4.4%, which at the time had briefly erased nearly $1 billion ($994.2 million) in market capitalization, according to USA TODAY research. The decline highlights just how serious a situation United faces. Airplane travel rarely tops the list of quality consumer experiences, but the scandal appears to have set off a serious discussion around United, the airline industry, and police procedure.
Sometimes, a shocking controversy like this one is both freakish and representative. Indeed, this incident is an extraordinary occurrence - overbookings. Airlines routinely sell tickets to more people than the plane can seat, counting on several people not to arrive. When there are not enough seats, airlines first try to offer rewards to customers willing to reschedule their plans, usually in the form of travel vouchers, gift cards or cash. The arrangement — which is usually negotiated before passengers board the plane. But involuntarily bumping passengers is rare. In 2016, United involuntarily denied boarding to 3,765 of its more than 86 million passengers on oversold flights, according to the Transportation Department.
David Dao, the unlucky passenger who was dragged off the plane, has filed an emergency "bill of discovery" against the carrier in Illinois State Court demanding that evidence documenting Sunday's "re-accommodation" aboard a Kentucky-bound plane be "preserved and protected."
Things to ponder!
Although this incident was unusual in many respects, it was also representative of an airline industry that has considerable power over consumers—even if the use of force is more subtle than a group of security professionals wrestling a passenger to the floor.
As you can see, even a big business like United Airlines has suffered such heavy losses due to the enormous power of social media.