April 12, 2017

United Airlines: What can we learn from company's 'breathtakingly bad' crisis management?

The public relations fiasco United Airlines is facing began with a viral video and snowballed into a $1 billion drop in market value and a damaged brand.

On Tuesday (US time), video of 69-year-old David Dao being forcibly dragged off a full United Express flight by police and bleeding from the mouth was released online.

Since then, Oscar Munoz, CEO of United's parent company, has scrambled to contain the damage to the carrier's reputation.

Despite making three apologies over the incident, online petitions calling for Mr Munoz's resignation have attracted tens of thousands of signatures.

The huge online backlash has seen United Continental Holdings Inc's stock price from fall from $73.80 on Friday to $69.93 at Wall Street's close on Wednesday.

Mr Dao has launched legal action, and officers involved have been placed on leave.

So, how did it get this bad?

Public Relations Institute of Australia president Jennifer Muir said the whole fiasco could have been avoided if United Airlines had apologised immediately.

"Once the video was live, there was only one way they could go — and that was to apologise," Ms Muir said.

Instead, Mr Munoz issued a poorly executed statement a full day after the video went viral.

Ms Muir said standard practice would have been for Mr Munoz to publicly explain what reparation they would offer Mr Dao.

"His apology didn't adequately match the seriousness of what was portrayed in the video. He didn't understand how the video was being received," she said.

In a second statement issued to staff, Mr Munoz referred to Mr Dao as "disruptive and belligerent" and in a third statement, offered his "deepest apologies for what happened".

"In delicate situations of issues management, people read into every word you use and people have to be very careful about which ones they choose," Ms Muir said.

"It seems, from the public perception, that [United were] unaware of the dangers of mistreating customers and the consequences that can have."

Mr Munoz has since delivered his fourth statement on US television saying he felt "ashamed" watching the video and promised the incident would "never happen again on a United flight".

He called the embarrassment a "system failure" and declared United would no longer use law enforcement to remove a "booked, paid, seated passenger" from full flights.

Critics might say a fourth apology is too little too late, but Ms Muir said this was finally an appropriate response.

"It has taken nearly four days for the United's CEO to strike the right tone of sincerity. This is a good sign that they are learning from this incident," she said.

"Good crisis management practice should have immediately acknowledged the airlines failing, and conceded that the failure was breathtakingly bad from a customer-service perspective."

Ms Muir said that ultimately, United would have to spend millions of dollars for internal reviews and to repair the company's reputation.

"But all of this could have been avoided.

Why didn't they just apologise from the outset?

Ms Muir said large companies like United have response plans for every possible crisis scenario.

She said it was possible something had gone wrong within the organisation because management had not listened to their experts and advisers.

"They've knee-jerked their response to say it's not our fault. It just comes off as arrogance.

What's the lesson?

United Airlines has been a trending topic on social media since the video was first posted on Tuesday. But not all publicity is good.

Ms Muir said the reason it has probably held traction on social media was the social injustice of the situation — that a paying customer was removed so that airline staff could fly.

She said crisis management was a two-sided coin, with operational issues on one side and the public's perception is on the other.

"You have to look at both sides but you can't ignore or underestimate the impact of your public reputation. That's the one you always have to deal with first."

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