United Airlines CEO apologizes once again - profits down 69%

Will United Airlines’ Customer Problems Impact Investors

Will United Airlines’ Customer Problems Impact Investors

In regard to the sale of a seat when there is a no-show, airlines are technically selling a seat that has been sold; the seat on that flight belongs to the passenger who could not fly for whatever reason.

The incident stoked global outrage and talk of boycotts on social media, although some analysts think it will not significantly affect United's financial prospects.

The passenger - Dr. David Dao from Kentucky - suffered a concussion, broken nose and other injuries when he was violently pulled from his seat by aviation security officers.

These changes come after a video showing Dao being forcibly removed from an aircraft went viral.

"We've always thought to repay our customers' trust with the highest quality of service and deepest level of respect and dignity", Munoz said.

The violent removal of a passenger on a United Airlines flight has prompted US Senator Richard Blumenthal to propose a new passengers Bill of Rights that would mandate compensation for travellers involuntarily "bumped" from their airline seats.

On a conference call to discuss those results, Munoz started by apologizing again for the April 9 scene on a United Express plane at Chicago's O'Hare airport.

In that spirit, Munoz said that from now on airplane crews traveling as passengers on United flights must be booked 60 minutes before departure.

"It's too early to tell anything about bookings", said United President Scott Kirby, responding Tuesday on the carrier's fourth-quarter earnings to a reporter's question about the incident's impact on leisure bookings. On the call, Chief Executive Officer Oscar Munoz said he would have "further conversations with customers and related governmental officials" in an upcoming trip to China that had been planned prior to the incident. The airline is conducting a review of what happened with Dao, which is due April 30.

In the wake of the incident, Munoz said he has reached out to members of the Chinese consulate in Chicago. Munoz repeated his apology Tuesday to Dao, other passengers on the flight and the rest of the airline's customers. As part of that, United will no longer use law enforcement to remove paid passengers from flights if they're not a security risk.

For the first quarter, United recorded net income of $96 million, down from $313 million a year ago.

United spooked some investors and analysts in February when it announced it would add 47 round-trip flights in the US starting this summer as it tried to boost connections at its major hubs. Analysts had projected earnings of 38 cents per share on revenue of $8.38 billion, according to Thomson Reuters consensus estimates.

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