United Learns a Costly Lesson About Customer Engagement

Canceling that Monday morning flight out of Louisville might have been a less costly proposition for United Airlines after all.

In a sordid episode that will live on in countless business cases of “what the hell not to do,” United’s personnel -- from its gate staff to CEO Oscar Munoz -- became a gift that kept on giving, and not in a good way.

It started with staff at Chicago O’Hare Airport, who waited until passengers were seated for a sold-out Sunday evening flight before deciding to randomly deplane four unlucky passengers. One refused to give up his seat for flight crew that needed to fly out of Louisville the next day in order to meet federal regulations for rest time before they could fly again – and we’ve seen the outcome on social media.

If those smartphone videos were not damning enough, United’s attempt at crisis communications made this sorry episode even worse.

Initially the airline claimed the flight was overbooked, which was not true. Later, the airline apologized for having to “re-accommodate these customers,” which opened to door to constant mockery via relentless memes on social media.

If that did not sound arrogant enough, a company-wide email from Munoz went viral (companies have got to learn that these employee-only emails always go public at some point). Munoz disparaged the assaulted passenger, David Dao, as “disruptive and belligerent,” while lauding United’s employees for following “established procedures.”

True, the actions of the Chicago Aviation Security officers did not help matters, and mainstream media reporters salivating at the opportunity to explore Dao’s “troubled past” was a disturbing sideshow. But this public relations nightmare is on the shoulders of United -- which, along with its competitors Delta and American, has become increasingly tone-deaf to passengers in recent years with nickel-and-diming, poor service and an often confrontational approach toward customers.

Stunts such as denying seats at the gate because the customer did not check in online, or the failure to communicate a delayed flight’s progress, serve only to antagonize the people these airlines need the most: passengers. It is no wonder that, even if they did not tweet about their feelings publicly, many current and past United customers have indulged in schadenfreude the past 48 hours.

And in a cruel twist of fate, last month Munoz was named “U.S. Communicator of the Year” by the magazine PRWeek. Not that communications professionals should watch Kerry Washington’s "Scandal" to learn public relations tips, but Olivia Pope’s sage advice to “never lie” somehow escaped both Munoz and his company’s corporate communications department.

Much of the chatter on Twitter and other social media was the twisted hope that United will get sued for millions. That probably will never happen, based on the fine print that appears before users buy a ticket online. That “contract of carriage,” which USA Today estimated as approximately 37,000 words long, in layperson’s terms puts passengers at the mercy of airlines, which can deny a seat to a customer for many reasons.

Some reasons are for safety, as in denying a passenger the right to board if he or she is intoxicated. Then there is the phenomenon of overbooking – it's annoying for passengers, but most aviation industry analysts agree the practice is necessary in order for airlines to function and make a profit.

But what the airline said its employees did in Chicago are not squared with what passengers experienced and recorded on video, adding to the mounting distrust. And as a result, while United will probably not be sued (or will win if this case ever is litigated), the airline is paying two prices.

First, United’s stock price cratered yesterday as anger raged across social media. The stock lost 4 percent of its value, or close to a billion dollars of the company’s valuation before noon. That could not have pleased Warren Buffet, who owns 9 percent of United: His $2 billion stake in the company dipped by at least $90 million.

The stock rebounded before the markets closed, in a large part because Munoz finally offered a mea culpa for what he described as a “truly horrific” incident.

But this episode will add to the travel industry’s jitters. Newark Liberty Airport, for example, is one airport that has seen a decline in international ticket sales this spring. And in a political climate where just about everyone who is non-white feels as if they are being singled out one way or another, Flight 3411 may remind many people here and abroad to pause before deciding if they really want to board a plane within, or bound for, the U.S.

As of press time, Dao is still reported to be hospitalized, so do not expect this story to disappear any time soon.

Second, the Sunday night fiasco at O’Hare has demolished the company’s already shaky brand reputation. United must prove to customers, many of whom are how determined to avoid flying with the company, that it has learned from this incident and will work to regain their trust.

The company’s social media team, which in reality is now the face of United, needs to find ways to communicate such an event without becoming buried in the public’s anger and condescension. And employees need to feel as if they are empowered to rectify a situation to a customer’s satisfaction, not fear retribution for costing the company money (on a Sunday night, $1,000 for a future United flight is not enough for most people to give up their seat). Admitting the company was wrong, or went about the flight disruption poorly, is a start. The problem with apologies, however, is if they come too late, they take a long time to be accepted, if they are at all.

The fact is that no one really wins in the Flight 3411 fallout – except for Kendall Jenner and Pepsi, who were the prior targets of public disdain over that absurd faux protest video. For now, United will be wearing the corporate dunce cap for the foreseeable future.

Image credit: wilco737/Flickr