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United in damage control12th Apr 17
Geoffrey Stackhouse, Managing Director, Clarity Solutions
United Airlines' market cap dropped nearly US$1 billion yesterday as the company was punished for their shocking assault on a passenger and the CEO's belligerent media statements.
We covered the incident and the problems with the first two official 'apologies' in a post yesterday.
In damage control mode Munoz finally issued a third apology, and this time he got it right. He named the outrage, showed he was serious and outlined what he would do to fix the problem.
But not before he'd shot himself in the foot by issuing an internal email to all staff which was back to his blame the victim script.
"...while the facts and circumstances are still evolving, especially with respect to why this customer defied Chicago Aviation Security Officers the way he did ... this 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. ...Our employees followed established procedures ... 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."
What seems to have made United see the light was the outrage from China over the perceived targeting of an Asian American. The video has had more than 200,000 views in China and provoked more than 50,000 comments, mostly calls for a boycott.
United has more than 20% of the China-US passenger market and that's set to double in the next 5 years and will be a major driver of the airlines profitability. The key reason why the share price has taken a beating.
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