Case: United's Turbulent Communications Strategy

Case: United's Turbulent Communications Strategy

United Airlines is one of the worlds largest airlines serving 353 destinations across five continents. The Chicago-based carrier has approximately 92,000 employees and earned more than $41 billion in revenue in 2018.¹ Oscar Munoz started as Uniteds CEO in 2015, and by March 2017 was named Communicator of the Year by PRWeek. Unfortunately, he fell from grace a month later due to Uniteds botched response to a flight-related incident.² Lets consider how United communicated about the incident.

Sunday, April 9: Chaos on Flight 3411

A fully booked United flight 3411 was preparing to depart from Chicago to Louisville when gate agents realized that four airline crew members needed to get to Louisville. The gate agents asked for four volunteers to give up their seats in return for compensation. No one accepted Uniteds offer because the flight was the last one to Louisville that evening. United then decided to enact an involuntary de-boarding situation, in which four random passengers were directed to deplane. Three of the passengers deplaned without incident. The fourth, Dr. David Dao, refused, saying I cant get off the plane. I have to get home. Im a doctor. I have to get to the hospital in the morning, according to The Sentinel News.³

United employees responded to Dao by contacting the Chicago Department of Aviation Security. A scuffle broke out between the officers and Dao when they tried to forcibly remove him from the plane, resulting in a concussion, broken teeth, a broken nose, and other injuries for Dr. Dao. The bloodied image of Dr. Dao was posted on social media and rapidly spread around the world.⁴

Monday, April 10: Uniteds Initial Response

A series of communication blunders transpired the next day:

United released a statement apologizing for the overbook situation. The airline would later backtrack and clarify that the flight was not actually overbooked, and passengers were removed to make space for United employees.

CEO Munoz released a public statement on Twitter calling the incident an upsetting event, but did not address the treatment of passenger Dao. He apologized to the passengers who were involuntarily deplaned but called their removal reaccommodation.⁵ According to Sean Czarnecki of PRWeek, the word reaccommodate was then lodged in the Internet lexicon as a United Airlines euphemism for brutally assaulting your customers.⁶

CEO Munoz sent an internal letter to United employees blaming Dr. Dao for what happened, calling him disruptive and belligerent. He also stated that he fully supported his employees handling of the situation.⁷ The internal letter quickly became public, which flamed the negative publicity.

News outlets compared videos of a bloodied and bruised passenger being dragged off an aircraft with Uniteds defensive, un-empathetic, written responses.⁸ The result was outrage on social media with thousands of flyers signing a petition demanding Munozs resignation. Many also called for a boycott of United, whose slogan of Fly the Friendly Skies was tarnished by the incident.⁹ In fact, a survey conducted by Morning Consult found that nearly half of the respondents said they would pick a more expensive, longer flight to avoid giving United their business.¹⁰

Tuesday, April 11: United Changes Course

A turbulent day on Wall Street kicked off after Uniteds initial response to the incident. The airline started the morning losing nearly $1 billion in stock value. Munoz responded by releasing another written statement. This time he struck a different tone and took full responsibility for the episode and said that Dr. Dao should not have been mistreated the way he was. The airline also pledged to conduct a review and quickly release findings. Although the statement helped reduce the stocks slide, United still closed the day down around $250 million.¹¹

Wednesday, April 12: Munoz Appears on TV

On Wednesday morning, Munoz utilized another medium of communication by appearing on ABCs Good Morning, America. His body language was solemn as he said he felt shame when he saw the video of Dao being dragged off the plane. This can neverwill neverhappen again on a United Airlines flight. Thats my premise and thats my promise, Munoz told viewers.¹² The airlines efforts may not have been enough to turn the tide. A survey taken by LendEDU after Munozs TV appearance found that 42% of millennials, the most frequent business travelers of any generation, would still not fly with United.¹³

A Tough Couple of Weeks for Munoz and United

The crucial conversations spurred by flight 3411 continued for weeks after the incident. United published full-page ads in several major US newspapers in late April. The ads included an apology from Munoz. That day, corporate policies were placed ahead of shared values, said Uniteds CEO. The ads also outlined how the airline was changing its policies to prevent the reoccurrence of such an incident.¹⁴

Munozs handling of the situation took a toll on his career at United. The airlines parent

company, United Continental Holdings, denied the CEOs planned promotion to chairman weeks

after the incident.¹⁵ Ironically, he too lost a seat he expected to receive.

Footnotes

1. United Airlines Annual Form 10-K for Year Ended December 31, 2018, http://ir.united.com/investor-relations (accessed March 27, 2019).

2. M. Castillo, United CEO Oscar Munoz Was Recently Named Communicator of the Year by PR Week, CNBC, https://www.cnbc.com/2017/04/ 11/united-ceo-oscar-munoz-recently-named-communicator-of-the-year. html (accessed March 27, 2019).

3. Ashley Sutter, Shelby Woman on United Flight Says Incident Was Avoidable, The Sentinel News, April 14, 2017, https://www.sentinelnews. com/content/shelby-woman-united-flight-says-incident-was-avoidable.

4. C. Zdanowicz and E. Grinberg, Passenger Dragged Off Overbooked United Flight, CNN, April 10, 2018, https://www.cnn.com/2017/04/10/ travel/passenger-removed-united-flight-trnd/index.html.

5. E. McCann, Uniteds Apologies: A Timeline, The New York Times, April 14, 2017, https://www.nytimes.com/2017/04/14/business/united-airlines-passenger-doctor.html.

6. S. Czarnecki, Timeline of a Crisis: United Airlines, PRWeek, June 6, 2017, https://www.prweek.com/article/1435619/timeline-crisis-united-airlines.

7. N. Khomami and J. Lartey, United Airlines CEO Calls Dragged Passenger Disruptive and Belligerent, The Guardian, April 11, 2017, https:// www.theguardian.com/world/2017/apr/11/united-airlines-boss-oliver-munoz-says-passenger-belligerent.

8. C. Zdanowicz and E. Grinberg, Passenger Dragged Off Overbooked United Flight, CNN, April 10, 2018, https://www.cnn.com/2017/04/10/ travel/passenger-removed-united-flight-trnd/index.html.

9. N. Khomami and J. Lartey, United Airlines CEO Calls Dragged Passenger Disruptive and Belligerent, The Guardian, April 11, 2017, https:// www.theguardian.com/world/2017/apr/11/united-airlines-boss-oliver-munoz-says-passenger-belligerent.

10. J. Passy, Survey: Nearly Half of Young Americans Say They Wont Fly United Anymore, MarketWatch, April 21, 2017, https://www.marketwatch.com/story/nearly-half-of-young-americans-wont-fly-united-anymore-2017-04-21.

11.. S. Czarnecki, Timeline of a Crisis: United Airlines, PRWeek, June 6, 2017, https://www.prweek.com/article/1435619/timeline-crisis-united-airlines.

12. E. McCann, Uniteds Apologies: A Timeline, The New York Times, April 14, 2017, https://www.nytimes.com/2017/04/14/business/united-airlines-passenger-doctor.html.

13. J. Passy, Survey: Nearly Half of Young Americans Say They Wont Fly United Anymore, MarketWatch, April 21, 2017, https://www.marketwatch.com/story/nearly-half-of-young-americans-wont-fly-united-anymore-2017-04-21.

14. C. Thompson, Uniteds CEO Bought a Full Page Ad in Dramatic Apology for Passenger Dragged Off Plane, Business Insider, April 27, 2017, https://www.businessinsider.com/united-ceo-apologizes-in-ad-for-passenger-dragged-from-flight-2017-4.

15. B. Meier, Oscar Munoz Wont Get Planned Promotion to Chairman of United, The New York Times, April 21, 2017, https://www.nytimes. com/2017/04/21/business/united-airlines-ceo.html?_r=0.

question #2

Assume that instead of changing his tone on Tuesday and Wednesday, United CEO Munoz continued blaming Mr. Dao for the incident. What type of negotiating cognitive bias would this portray?

Multiple Choice

Negotiator overconfidence

Endowment effect

Escalation of commitment

Anchoring and adjustment