In July 2000, United was forced to cancel 4,800 flights during the busy summer travel season because many of its union pilots refused to work overtime. The situation stabilized only after United granted industry-leading pay to its pilots.

The terrorist attacks of September 11, 2001, shook the airline industry. United was impacted in a profound way as two of its aircraft were among the four planes hijacked by terrorists. One crashed in Shanksville, Pa., and the other hit the World Trade Center. Soon after the mishap, United experienced a drop in passenger traffic and eventually had to announce the layoff of approximately 20,000 employees.

Human Resource and Organization Behavior Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

PayPal (9 USD)

FLIGHT 3411 INCIDENT

On April 9, 2017, Dr. David Dao (Dao), a 69-year-old passenger, was forcibly removed from United flight 3411 by aviation police officials at Chicago’s O’Hare international airport. After the passengers had boarded the flight, the staff announced that the flight was overbooked, and so they needed four people to volunteer to give up seats so that its crew members could be accommodated. Four crew members needed to get into the flight in order to report at Louisville for work. The passengers were told the plane wouldn’t leave until four people volunteered. The airline initially offered US$800 and a hotel stay against each seat...

CALLOUS RESPONSES TO THE CHAOS

On April 9, 2017, United in a brief statement, stated, “Flight 3411 from Chicago to Louisville was overbooked. After our team looked for volunteers, one customer refused to leave the aircraft voluntarily and law enforcement was asked to come to the gate. We apologize for the overbook situation.”..

AFTERMATH

The insensitive statements of the CEO plunged the airline into a PR crisis. The airline jargon and public relations spin did not go down well with most people and United’s responses came in for ridicule. Munoz’s boiler plate apology only served to ignite more fury. People felt the CEO had extended an insult to Dao’s injury. Munoz was criticized as being “painfully tone deaf” and of having “no concept of the definition of the word right.” ..

MUNOZ’S LATE APOLOGIES

Mired in controversy, Munoz issued another apology. On April 11, 2017, he wrote, “I share all of those sentiments and one above all: my deepest apologies for what happened.” (Refer to III Exhibit for details) Munoz added that United would take “full responsibility” for the situation and also promised that the company would conduct a thorough review of “crew movement, our policies for incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement,” and provide the reports by April 30. ..

ACTION

On April 13, 2017, just a few hours after Demetrio’s press conference, the Chicago Aviation department placed two more officers involved in removing the passenger on administrative leave until further notice as a part of the review. United stated that henceforth law enforcement officers would not be used to remove passengers from flights unless it was a matter of safety and security...

MAKING AMENDS: CHANGING POLICIES

On April 27, 2017, United came out with a review report in which Munoz accepted that ‘many things went wrong that day’. He also said, “Our policies got in the way of our values, and procedures interfered in doing what’s right.” The company also announced 10 policy changes to ensure that what happened to Dao wouldn’t happen to anyone else (Refer to IV Exhibit for more Details). While a few policies went into effect immediately, a few were to be implemented through 2017...

DEBATE ON OVERBOOKING

The Flight 3411 incident sparked a debate over the overbooking policy followed not only by United but other airlines too. Overbooking, a global phenomenon, had been routinely practiced by airlines and it was not illegal. As a part of their business, airlines overbooked to ensure they filled the planes as much as possible. Overbooking was done based on forecasts of seat being left vacant by last minute cancellations or people who did not show up for their flight. ..

THE ROAD TO CHANGE

With the new policies, United initiated a culture shift toward becoming a more customer-focused airline. Munoz said, “Our customers should be at the center of everything we do and these changes are just the beginning of how we will earn back their trust.” In addition, the company was also working toward avoiding putting customers, employees, and partners into ‘impossible situations’ and reducing incidents of IDBs to as close to zero as possible. Munoz was equally concerned about regaining the trust of the employees. ..

DEBATE ON OVERBOOKING

EXHIBITS

Exhibit I: American Customer Satisfaction Index (ACSI) scores for United Airlines in the United States (1995-2017)
Exhibit II: Munoz’s Letter to Employees
Exhibit III: Munoz’s Apology
Exhibit IV: Policy Changes at United
Exhibit V: Number of Passengers Denied Boarding by the Largest U.S. Air Carriers from 1990 to 2017
Exhibit VI: Ranks of Airlines in terms of IDBs