Over USD$ 1 billion wiped off holding United Airlines

United Airlines CEO offers softer apology after stock nosedives

Close to $1bn wiped off holding company’s value before stock rallies, after a man was violently removed from a flight by aviation police

Dominic Rushe and David Smith, April 12th 2017

The CEO of United Airlines has issued a second public apology about the man who was forcibly removed from a flight on Sunday, calling the incident “truly horrific”.

“No one should ever be mistreated this way,” Oscar Munoz wrote in a note to employees Tuesday, one day after video posted by fellow passengers showing police dragging the man off the plane went viral.

Munoz was criticized after his official statement on Monday described the violent removal as an effort to “re-accommodate” passengers. He also described the man as “disruptive and belligerent”. As the company’s share prices plunged on Tuesday, however, the executive turned attention back on to the company.

Nearly $1bn of the company’s value was erased in trading on Tuesday. Later that day, Munoz said he was committed to “fix what’s broken so this never happens again”. He pledged to review the company’s policies for seeking volunteers to give up their seats, for handling oversold flights and for partnering with airport authorities and local law enforcement.

The company plans to share results of the review by 30 April.

The value of the carrier’s holding company, United Continental Holdings, had fallen over 4% before noon, knocking almost a billion dollars off its value. It rallied slightly, leaving the share price down 2.8%, close to $600m less than the company’s $22.5bn value as of Monday’s close.

Investors had largely shrugged off United’s woes during trading on Monday. The airline’s stock finished Monday’s trading session 0.9% higher, adding about $200m to the company’s market cap.

But the airline’s problems only seem to have escalated since Sunday, when a man was violently removed from a flight by aviation police officials at Chicago’s O’Hare international airport after refusing to volunteer his seat on the overbooked flight.

In one video clip, guards aggressively grab then drag the passenger down the aisle of the plane as other passengers shout: “Oh my God” and “Look what you did to him”.

Sean Spicer, the White House press secretary, said he was “sure” that Donald Trump had seen the video.

“I don’t think anyone looks at that video and isn’t a little disturbed that another human being is treated that way,” he told reporters. “Clearly watching another human being dragged down an aisle, watching blood come from their face after hitting an armrest or whatever, I don’t think there’s a circumstance that you can’t sit back and say this probably could have been handled a little bit better, when you’re talking about another human being.”

Spicer noted that United was conducting a review and described it as a local matter that did not necessarily require a federal response. “I think there’s plenty of law enforcement to review a situation like that and I know United Airlines has stated that they are currently reviewing their own policies. Let’s not get ahead of where that review goes.”

On Tuesday, Munoz attracted criticismafter calling the passenger “disruptive and belligerent” and saying that the airline’s employees had “followed established procedures”.

The passenger is overheard in one video claiming he was being profiled for being Chinese, and the video has caused outrage in China and calls for a boycott.

Ahead of the market’s open, United shares had been down by as much as 6% in premarket trading.