Tutorial 3 casestudy- United Airlines PDF

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By Kaleel Rahman, RMIT University How would you react if you were told at the airport that your seat had been taken because you were too late to arrive at the airport, even though the flight had not departed? How would you label what the airline had done to you? Would you call it unethical, unjust, illegal, unfair, socially irresponsible, immoral or bad customer service? This is even worse. A passenger, who already boarded and sitting in his seat, was forcibly removed from a United Airlines flight (from Chicago O’Hare to Louisville) after failed attempt to find volunteers to four of its employees who needed seats1. World’s third largest airline by revenue, head-quartered in Chicago, United Airlines has an extensive presence in the Asia-Pacific region and employs over 85000 people globally2. How could such a massive brand get it wrong? It appears, United Airlines had overbooked the flight. After boarding all passengers, the airline realised that four additional employees needed to be taken to the destination. When too few volunteers came forward to leave the airplane, law enforcement was tasked to select random passengers for removal. It is believed that an algorithm was used to select passengers at random. The airline offered cash incentives to willing volunteers. The passenger in question was a 69-year old medical doctor of an Asian descent, who refused to leave the airplane telling that he needed to see his patients the following day; hence he said “I have to go home” 3. The forcible removing of the passenger was shot from several angles and posted in the social media by fellow passengers4 . The subsequent incidents became history making it one of the worst brand-damaging events of all time. The airline’s parent company’s share price fell (wiping about A$340 million off the company's market capital)5; the CEO of the airline had to apologise incrementally to the passenger and the public over three times leading to shame and disgust6. The CEO of the airline, who had just been named the “communicator of the year” by Public Relations News, released a statement apologising for having to re-accommodate other 1

http://www.independent.co.uk/news/world/americas/united-airlines-doctor-david-dao-drag-flight-3411overbooking-chicago-hospital-a7679426.html 2 http://newsroom.united.com/corporate-fact-sheet 3 https://www.youtube.com/watch?v=WEw-GjTriIo 4

https://www.youtube.com/watch?v=VrDWY6C1178

5

http://www.latimes.com/business/la-fi-united-earnings-call-20170418-htmlstory.html

6

http://www.abc.net.au/news/2017-04-12/united-airlines-issues-third-apology-after-stock-pricetumbles/8436058

customers (but not apologising to the passenger in question)7. Rather, he described the passenger as “disruptive and belligerent” in a letter to employees, and said “workers followed established procedures”8. This response resulted in a tremendous backlash in social media. Only after the outrage reached the White House9 and the stock price tumbled, the CEO apologised to passenger and said “I deeply apologize to the customer forcibly removed and to all the customers aboard. No one should ever be mistreated this way”10. He also admitted later that it was a “humbling learning experience for all of us here at United and for me in particular”. Yet, it was way too late for United Airlines to recover from its failure. Sarcastic comments such as “if we cannot beat our competitors, we beat our customers”; “we will seat you then beat you” were quite common in Twitter feeds11. New slogans were created and posted in YouTube to ridicule the airline and some of them read as “We have red eye and black eye flights available”, “Let us re-accommodate you”12. In China alone, over 120 million people watched YouTube about the ejection of the customer within two days, China's popular social media platform Weibo (similar to Twitter) had been viewed more than 210 million times within 24 hours and millions of customers interpreted the removal as racially motivated. Others attributed this incident to Trump phenomenon and Americanism, and comments such as “violent, brutal, ignorant America”, “America is a brutal society” and “absolutely barbaric” were emerging13. In addition, the mockery and shaming of the incident became quite present in live shows and comedy events. For example, the ABC late night host Jimmy Kimmel mocked the airline on his Jimmy Kimmel Live with a fake commercial for United, which in part said “You do what we say… If we say you fly, you fly; give us a problem, and we'll drag you off the plane and if you resist, we'll beat you so badly”1415 .

7

http://www.cnbc.com/2017/04/11/united-ceo-oscar-munoz-recently-named-communicator-of-theyear.html

8

https://www.theguardian.com/world/2017/apr/11/united-airlines-boss-oliver-munoz-says-passengerbelligerent 9

http://whotv.com/2017/04/11/white-house-iowans-react-to-united-airlines-flight-scandal/

10

http://www.smh.com.au/business/aviation/united-shares-fall-as-social-media-firestorm-over-forciblyremoved-passenger-spreads-to-china-20170411-gvj3gy.html 11

https://twitter.com/paulocoelho/status/851829150159687681?lang=en

12

https://www.youtube.com/watch?v=VLn2uGjdTPE

13

http://www.pressreader.com/usa/new-york-post/20170412/281569470592270

14

https://www.dallasnews.com/business/airlines/2017/04/11/twitter-slogans-late-night-talk-shows-mockunited-overpassenger-dragging-video 15

http://www.chicagotribune.com/entertainment/chicagoinc/ct-united-drags-passenger-jimmy-kimmel20170411-story.html

In the meantime, amongst the competitive landscape of airline industry, other airlines seized this opportunity to capitalise on the moments. For example, Emirates, a strong rival to United, ran a comparative ad campaign to directly mock the CEO of United and its reputation. Seeing too good an opportunity to miss, Royal Jordanian tweeted “We are here to keep you #united. Dragging is strictly prohibited”16 Imagine for a moment that similar incidents occurring all the time across all walks of life. If the fellow passenger had not recorded the incident, would it have been escalated to this level? Even if the fellow passenger had recorded but did not have the facilities and luxuries to post in the global public arena, would this have captured the attention of millions of people? Fortunately, the luxury of social media and the web technologies such as YouTube, Facebook, and Twitter have paved the path so that customers can have their say. Complaining websites such as notgoodenough.org, complaintline.com.au also are available to consumers who want to take action. The incident raises many questions, including why airlines overbook and what United Airlines could have done differently17.

1: Discuss what United Airlines could have done differently to save the situation. 2: Discuss the power of social media in relation to companies making mistakes and the consumer’s ability to use social media to take actions against companies. 3: Distinguish between ethics, morality, justice, social responsibility, fairness and legality. How would you frame this incident? 4: Discuss to extent to which the United Airline’s brand image would have tarnished as a result of this scandal. 5: Despite common practice, the overbooking by airlines was severely scrutinised after this incident. Conduct a brief research on overbooking and give your conclusion as to whether overbooking is acceptable. 6: Review the “Corporate Responsibility Report” of United Airlines [http://crreport.united.com/] against the passenger removal incident and evaluate it within the contents of your chapter.

16

http://www.salon.com/2017/04/11/royal-jordanian-airlines-comes-for-united-dragging-is-strictlyprohibited/

17

https://theconversation.com/how-economics-101-could-have-prevented-uniteds-pr-nightmare-76127...