United stock was down three percent today in early trading. Anyone want to guess why? In what may be one of the worst customer service disasters in airline history, United is reeling from its decision to have a passenger forcibly removed from one of its planes.
You've heard the story. The airline was overbooked and needed four volunteers to skip the flight in exchange for an $800 flight credit and a free hotel stay. They got no takers, so their next move was to let their computer bump four people involuntarily. Three of them were annoyed, but left the flight. The fourth refused to go, and the airline called security to have him forcibly removed.
In the aftermath, United CEO Oscar Munoz made a somewhat apologetic statement. calling it an "upsetting event" and promising a full investigation. But in an email to employees, the company's CEO struck a vastly different tone. Here's some of what he said to employees, as quoted by The Guardian newspaper:
“The situation was unfortunately compounded when one of the passengers we politely asked to deplane refused and it became necessary to contact Chicago aviation security officers to help,” Munoz wrote in the letter obtained by CNBC and other news outlets.
“Our employees followed established procedures for dealing with situations like this. While I deeply regret this situation arose, I also emphatically stand behind all of you, and I want to commend you for continuing to go above and beyond to ensure we fly right.”
Munoz added that when crew members first approached the passenger to tell him to leave, he “raised his voice and refused to comply”, and each time they asked “he refused and became more and more disruptive and belligerent”.
Munoz added that there are some lessons to be learned here, but overall, the tone was defiant. I'd call it completely tone-deaf. What Munoz doesn't understand is that there's a problem within his airline. I used to fly Continental Airlines regularly. Loved them! But when the merger with United happened, the customer service I'd once appreciated disappeared. More than once, they left me completely aggravated with their almost dogmatic adherence to procedures over their customers. At the old Continental Airlines, their slogan was: "Work Hard. Fly Right." And they largely delivered on that promise. At United, they invite you to "Fly the Friendly Skies." But they don't appear to have a customer service doctrine that allows the skies to be all that friendly. I stopped flying United regularly a long time ago, and now only fly United with my remaining frequent flier miles.
How much has this cost the airline? That three percent stock market drop I mentioned at the outset is worth $675 million. The market rises and falls, so it could very well come back. But the drop indicates worry over the widespread repercussions of this fiasco. Will they lose customers? Almost certainly. The numbers may be negligible or significant, only time will tell. The bigger losses are in prestige and reputation. So yeah, they should have sweetened the pot to get their four volunteers. Or at the very least, had a few individual conversations with passengers. The computer shouldn't be the one making these tough decisions.