United Airlines

[Tugg Speedman]

Looks like Munoz was "half fired" for his bungling of this incident.

Will he get "all the way fired?"

United Airlines CEO Oscar Munoz No Longer Expected to Take Chairman Role in 2018
By Susan Carey
Updated April 21, 2017 5:07 p.m. ET

https://www.wsj.com/articles/united-airlines-ceo-oscar-munoz-no-longer-expected-to-take-chairman-role-in-2018-1492806979

United Continental Holdings Inc. moved to further stem fallout from the incident in which police dragged off a paying passenger from one its flights, saying its chief executive Oscar Munoz will no longer be taking on the chairman role and that it will revamp executive compensation incentives.

In a federal filing on Friday, United said its board is planning to revamp managerial incentive compensation to focus more on performance measures related to customer service.

The disclosures come almost two weeks after the incident, in which United employees called the Chicago Department of Aviation, whose police officers dragged a screaming passenger, David Dao, down the aisle and off United Express flight 3411, The issue is under investigation at both United and the aviation department.

Added

Sports and business share this in common ... when the Genernal Manager (or board) has to publicly come out and express support for the head coach (CEO) that is not good and means he is in trouble.

Mr. Munoz still has the support of the 15-member board, according to Robert Milton, the nonexecutive chairman, in a recent interview and a subsequent memo to United’s 85,000 staff last week. Another person familiar with directors’ thinking agreed, but added that “the entire board is of course concerned and is wanting to be responsive.”

[Tugg Speedman]

CHICAGO AVIATION POLICE QUIETLY BEING REBRANDED
Tuesday, April 25, 2017 06:35PM
http://abc7chicago.com/news/chicago-aviation-police-quietly-being-rebranded/1916798/

The ABC 7 I-Team has learned that Chicago Aviation Department officials have quietly begun retooling the Airport Police Department.

The move comes a little more than two weeks after police dragged a United passenger off a flight at O'Hare. The Chicago Aviation Police Department is being rebranded, the word "police" being stripped from their name and replaced with the word "security."

But the change from police officers to security guards has the officers' union preparing to file a labor complaint Wednesday morning claiming that the city is violating the airport police officers' contract.

[Pakuni]

On the day the passenger dragging story broke, UAL stock closed at $70.71.
Two weeks later, it closed at $70.97.

So much for the hot takes on this being the company's undoing.

[Tugg Speedman]

On the day the passenger dragging story broke, UAL stock closed at $70.71.
Two weeks later, it closed at $70.97.

So much for the hot takes on this being the company's undoing.

Curious, who said it was the company's undoing?

[GooooMarquette]

United will survive because there are too few options and a high cost of entry.

[Pakuni]

Curious, who said it was the company's undoing?

Fox  News, for one, suggested it:


A shocking video involving a United Airlines passenger being forefully removed from his seat and dragged out of the plane has drawn widespread outrage on social media, with many experts warning that it could do permanent damage to the brand.
Though social media trends come and go, in this new digital world where posts live forever online, experts say the dragging incident is likely to impart serious, longterm damage to the legacy carrier's brand.

Jim Linder, president and owner of marketing firm Fresh Branding Group suggests it might take United years to recover.

http://www.foxnews.com/travel/2017/04/12/united-getting-slammed-across-social-media-experts-warn-dragging-incident-may-cause-lasting-damage.html

[Golden Avalanche]

Fox  News, for one, suggested it:


A shocking video involving a United Airlines passenger being forefully removed from his seat and dragged out of the plane has drawn widespread outrage on social media, with many experts warning that it could do permanent damage to the brand.
Though social media trends come and go, in this new digital world where posts live forever online, experts say the dragging incident is likely to impart serious, longterm damage to the legacy carrier's brand.

Jim Linder, president and owner of marketing firm Fresh Branding Group suggests it might take United years to recover.

http://www.foxnews.com/travel/2017/04/12/united-getting-slammed-across-social-media-experts-warn-dragging-incident-may-cause-lasting-damage.html

I think Murdoch has a position in American Airlines. Not shocked Fox News would find a marketing firm to predict doom for UAL.

[Tugg Speedman]

Fox  News, for one, suggested it:


A shocking video involving a United Airlines passenger being forefully removed from his seat and dragged out of the plane has drawn widespread outrage on social media, with many experts warning that it could do permanent damage to the brand.
Though social media trends come and go, in this new digital world where posts live forever online, experts say the dragging incident is likely to impart serious, longterm damage to the legacy carrier's brand.

Jim Linder, president and owner of marketing firm Fresh Branding Group suggests it might take United years to recover.

http://www.foxnews.com/travel/2017/04/12/united-getting-slammed-across-social-media-experts-warn-dragging-incident-may-cause-lasting-damage.html

This is largely accurate and the fact that Munoz has been stripped of his upcoming chairmanship and is having his compensation plan re-worked suggests that the UAL board also agrees with this.

Such a brand loss cannot be measured by two weeks of stock price action.  But if you insist that is the measure, note that UAL has badly lagged both the S&P 500 and airline index since the incident.

[Jay Bee]

Obviously the "doctor" was an aggressive, non-compliant jerk. Sometimes when you flail fists, resisting extraction, you might hit your head.

Sometimes felons who have a history of drugs-for-gay-sex deals are unruly. Here... appears to be the case.

[Pakuni]

Such a brand loss cannot be measured by two weeks of stock price action.  But if you insist that is the measure, note that UAL has badly lagged both the S&P 500 and airline index since the incident.

Badly lagged? LOL.
The airline index is up 1.65 percent since the incident (as of closing today).
UAL is up 1.63 percent since the incident.

[Tugg Speedman]

Badly lagged? LOL.
The airline index is up 1.65 percent since the incident (as of closing today).
UAL is up 1.63 percent since the incident.

Where did you get your numbers? 

The incident was the evening of April 9 (Sunday).  The story was not out and understood until sometime on April 10.  Since April 10 ...

UAL -.37%
S&P 500 1.29%
Airlines 1.86%

But if you insist that we should use Friday, April 7 levels

UAL 0.63%
S&P 500 1.40%
Airlines 2.13%

And yes, these are significant differences for a two week period.  Especially the airline index underperformance considering that UAL is a big part of the airline Index

Since April 7

United (UAL) = 0.63%
American (AAL) = 10.98%
Delta (DAL) = 2.66%
Southwest (LUV) = 4.40%

United competitors are flying higher because UAL is constantly screwing up.

Why do you think Munoz is getting stripped of his chairmanship and a pay cut????  It not about political correctness.  He screwed up and it is costing them, so the board is punishing him!!

[Pakuni]

Where did you get your numbers? 

My numbers are from closing April 11 (the day the incident became public) to closing April 26.
UAL
https://finance.yahoo.com/quote/UAL?p=UAL

Airline index
https://finance.yahoo.com/quote/%5Exal?ltr=1

You, of course, are as usual shifting the goalposts from claiming this was disastrous for UAL to "Munoz screwed up and the board is punishing him."
Not the same thing.

[B. McBannerson]

Fox  News, for one, suggested it:

This is true, but CNN, AdAge, Chicago Tribune, Money Magzine, Bloomberg, and so many others also said the same and all used the words could or may.  Too early to tell what kind of short term damage.  Long term they will weather the storm unless additional incidents pile on.

Though a Georgetown marketing professor makes the argument stock price isn't the way to judge this, and will take years to rebuild brand.  http://thehill.com/blogs/pundits-blog/transportation/328962-damage-to-united-airlines-brand-to-be-lasting-irreparable 

[dgies9156]

As I noted seven takes ago, I've flown United for years. My relationship with them goes back to 1980 and I have been a member of Mileage Plus almost since it started. I make no apologies for United or its behavior with Dr. Dao, but it seems that even this incident has been blown so out of proportion that it is ridiculous.

Operating an airline is a complex, capital and people intensive business. One screw-up and the Drive-By media goes berserk, picking up anything that goes wrong. With more than 400,000 people per day moved, I can promise you something goes wrong regularly.  I had a minor problem with an upcoming flight for Sunday and I'm surprised two reporters weren't there to tape it. Not surprisingly, United fixed it.

United has had stock performance issues for some time. I doubt seriously that anything done with Dr. Dao has had more than an intraday impact on their share price. Since Oscar replaced Commander Jeff, many of the operational problems United has are being resolved and the level of customer service has improved dramatically. The labor problems have been fixed and the customer commitment on a day-in, day-out basis is far better than just a few short years ago.

If you wanted to see crappy airline commitment, lousy service and "don't give a damn attitudes" about customers, you should have flown them during their bankruptcy or during the summer of discontent. No, they didn't drag anyone off airplanes, but flying them was akin to being waterboarded on a regular basis. When the pilots got mad, taxiing at ORD became a three-hour tour. Flights got cancelled ostensibly because of safety but more likely because an angry pilot had a hang nail or a cockpit had a speck of dirt somewhere.

Those days, we hope, are over.

[Tugg Speedman]

My numbers are from closing April 11 (the day the incident became public) to closing April 26.
UAL
https://finance.yahoo.com/quote/UAL?p=UAL

Airline index
https://finance.yahoo.com/quote/%5Exal?ltr=1

You, of course, are as usual shifting the goalposts from claiming this was disastrous for UAL to "Munoz screwed up and the board is punishing him."
Not the same thing.

Why did you use April 11th close as a starting point?  This thread was already half-way through page 2.  The markets already had two days to react to the news.

And as far as the goalpost shifting, you were the one that contended that the stock price was the proper metric and you dug up some obscure news story saying the company was toast.  No one here over 8 pages said the company was toast.

The stock story is not how UAL has not declined but how its immediate competitors like Southwest, Delta's and American have surged in the wake of this incident.

Here is United's real problem ... its employees want out.  They are reporting customer abuse is off-the-charts since this incident.  They hate going to work so they can be verbally abused and have to deal with belligerent passengers all day.  They fear that anything over a heavy sigh is recorded on 5 camera phones and uploaded to social media within 10 minutes.  United passengers think they have a right to yell at United employees.

So United's risk is their best employees, the one's that have options will quit, retire or explore options at other airlines.  That means this incident will skim the best employees leaving them with a worse workforce.

[Tugg Speedman]

United Says Litany of Failures Led to Flight Fiasco
Airline’s report offers details in incident in which David Dao was dragged from plane
By Susan Carey
April 27, 2017 1:01 a.m. ET

https://www.wsj.com/articles/united-says-litany-of-failures-led-to-flight-fiasco-1493269261?mod=e2tw

A new report by United Airlines has concluded that a litany of failures in customer service, training and technology contributed to the forcible removal of a paying passenger earlier this month.

In an 11-page report, United Continental Holdings Inc. UAL 0.51% sought to give a more complete account of the events—including previously unreported details—that led to the April 9 dragging by aviation police of Dr. David Dao from a commuter flight. It said the incident, which sparked international outrage, exposed key gaps in various areas of customer service that the company promises to address this year.

It was “a failure of epic proportions that’s grown to this breach of public trust. We get that,” said United’s chief executive, Oscar Munoz, in an interview. “We let our policies and procedures get in the way of doing the right thing.”

[Pakuni]

Why did you use April 11th close as a starting point?  This thread was already half-way through page 2.  The markets already had two days to react to the news.

Because that's the day the news broke.
Is it your contention that this incident was hurting UAL stock two days before it became public, with one of those two days being a Sunday?
Interesting theory. Completely insane, but interesting.

And as far as the goalpost shifting, you were the one that contended that the stock price was the proper metric and you dug up some obscure news story saying the company was toast.  No one here over 8 pages said the company was toast.

Ha!
"Fox News is obscure," says the guy who regularly cites Breitbart. Classic Smuggles.

You're right, no one used the word toast.
But someone in this very thread - I think you can guess who - referred to them being in danger of "being a former airline"

Here is United's real problem ... its employees want out.  They are reporting customer abuse is off-the-charts since this incident.  They hate going to work so they can be verbally abused and have to deal with belligerent passengers all day.  They fear that anything over a heavy sigh is recorded on 5 camera phones and uploaded to social media within 10 minutes.  United passengers think they have a right to yell at United employees.

You have quite the imagination.

[GGGG]

United will be fine.  The news cycle changes, people go back to their purchasing habits, and life goes on.

[#UnleashSean]

Malaysian Airlines and United Should merge. They both make Asians disappear

[Tugg Speedman]

Because that's the day the news broke.
Is it your contention that this incident was hurting UAL stock two days before it became public, with one of those two days being a Sunday?
Interesting theory. Completely insane, but interesting.

Ha!
"Fox News is obscure," says the guy who regularly cites Breitbart. Classic Smuggles.

You're right, no one used the word toast.
But someone in this very thread - I think you can guess who - referred to them being in danger of "being a former airline"


You have quite the imagination.

The news was out Monday morning, April 10.  That is the fact.

I said  Munoz was at risk of being a former airline executive, not United would be a former airline.  He was stripped of his chairmanship last week.  I'll take that as being 50% right (and those that said nothing will happen are now 50% wrong).

Yes, one random Fox story, quoting one marketing expert no one has ever heard of, is the very definition of obscure.  You're arguing a false premise, only you and your Fox link are arguing United was going away.  No one else said this. 

You are making the worst of all rookie/amateur mistakes in investing.  Zero is irrelevant.  United above or below April 10 or 11 level is meaningless.  All investing is relative.  United's stock is way behind it direct competitors of American, Southwest, and Delta.  That is what says they are suffering.  (note the XAL ETF you cited is equal-weighted, need a market cap weighted index if you want to make the case you are making.  I used market cap weighting below).

[Pakuni]

The news was out Monday morning, April 10.  That is the fact.

Fine, go from closing April 10. Makes no real difference. The predicted long-lasting impacts never occurred.

I said  Munoz was at risk of being a former airline executive, not United would be a former airline.  He was stripped of his chairmanship last week.  I'll take that as being 50% right (and those that said nothing will happen are now 50% wrong).

No, that's not what you said. Your post is there for everyone to see.

Yes, one random Fox story, quoting one marketing expert no one has ever heard of, is the very definition of obscure.  You're arguing a false premise, only you and your Fox link are arguing United was going away.  No one else said this. 

I never said United was going away. I said this would blow over, and it has. It was people like you predicting long-lasting damage, etc.

You are making the worst of all rookie/amateur mistakes in investing.  Zero is irrelevant.  United above or below April 10 or 11 level is meaningless.  All investing is relative.  United's stock is way behind it direct competitors of American, Southwest, and Delta.  That is what says they are suffering.  (note the XAL ETF you cited is equal-weighted, need a market cap weighted index if you want to make the case you are making.  I used market cap weighting below).

The Apple thread has somehow convinced me that you're not the best person to offer investing advice.

[Pakuni]

Well, that didn't take long.

Lawyers for David Dao, the Kentucky man who was violently removed from a flight for refusing to give up his seat earlier this month, said Thursday that they have reached a confidential settlement with United Airlines.

https://www.washingtonpost.com/news/dr-gridlock/wp/2017/04/27/united-dragging-report-our-review-shows-that-many-things-went-wrong-that-day/?utm_term=.a378cd1177bb

[TAMU, Knower of Ball]

No violent removal in this one but thought I'd share: http://www.cnn.com/2017/04/27/us/delta-passenger-incident-trnd/

Happened in good ole Brew City!

[StillAWarrior]

Got me an email from Oscar (as I'm sure many of the rest of you did too -- hell, dgies probably got a call).  Probably part of the settlement...

Subject:  Actions Speak Louder than Words

Dear StillAWarrior,

Each flight you take with us represents an important promise we make to you, our customer. It's not simply that we make sure you reach your destination safely and on time, but also that you will be treated with the highest level of service and the deepest sense of dignity and respect.

Earlier this month, we broke that trust when a passenger was forcibly removed from one of our planes. We can never say we are sorry enough for what occurred, but we also know meaningful actions will speak louder than words.

For the past several weeks, we have been urgently working to answer two questions: How did this happen, and how can we do our best to ensure this never happens again?

It happened because our corporate policies were placed ahead of our shared values. Our procedures got in the way of our employees doing what they know is right.

Fixing that problem starts now with changing how we fly, serve and respect our customers. This is a turning point for all of us here at United – and as CEO, it's my responsibility to make sure that we learn from this experience and redouble our efforts to put our customers at the center of everything we do.

That’s why we announced that we will no longer ask law enforcement to remove customers from a flight and customers will not be required to give up their seat once on board – except in matters of safety or security.

We also know that despite our best efforts, when things don’t go the way they should, we need to be there for you to make things right. There are several new ways we’re going to do just that.

We will increase incentives for voluntary rebooking up to $10,000 and will be eliminating the red tape on permanently lost bags with a new "no-questions-asked" $1,500 reimbursement policy. We will also be rolling out a new app for our employees that will enable them to provide on-the-spot goodwill gestures in the form of miles, travel credit and other amenities when your experience with us misses the mark. You can learn more about these commitments and many other changes at hub.united.com.

While these actions are important, I have found myself reflecting more broadly on the role we play and the responsibilities we have to you and the communities we serve.

I believe we must go further in redefining what United's corporate citizenship looks like in our society. You can and ought to expect more from us, and we intend to live up to those higher expectations in the way we embody social responsibility and civic leadership everywhere we operate. I hope you will see that pledge express itself in our actions going forward, of which these initial, though important, changes are merely a first step.

Our goal should be nothing less than to make you truly proud to say, "I fly United."

Ultimately, the measure of our success is your satisfaction and the past several weeks have moved us to go further than ever before in elevating your experience with us. I know our 87,000 employees have taken this message to heart, and they are as energized as ever to fulfill our promise to serve you better with each flight and earn the trust you’ve given us.

We are working harder than ever for the privilege to serve you and I know we will be stronger, better and the customer-focused airline you expect and deserve.

With Great Gratitude,
Oscar Munoz
CEO
United Airlines


Can't help but wonder if, under their new policies, they would consider Dr. Dao "a matter of safety or security."  They'll still have to forcibly remove passengers from time to time; it's unavoidable.  The question is whether they'll exercise better judgment in determining whether it is "a matter of safety or security" and whether they'll take steps to ensure appropriate force.

Earlier today I booked five flights for June on United.  Keeping my fingers crossed for a couple of those $10,000 vouchers.

[WarriorInNYC]

Can't help but wonder if, under their new policies, they would consider Dr. Dao "a matter of safety or security."  They'll still have to forcibly remove passengers from time to time; it's unavoidable.  The question is whether they'll exercise better judgment in determining whether it is "a matter of safety or security" and whether they'll take steps to ensure appropriate force.

Earlier today I booked five flights for June on United.  Keeping my fingers crossed for a couple of those $10,000 vouchers.

On the first part, if they had gotten to the $10k limit and they ended up needing to boot someone off the flight, then I don't see how it wouldn't ultimately be considered "a matter of safety or security" and security would be called.  How else do you remove someone from a flight that refuses to leave the plane?  And if were to say no, and then you go back and choose another random person, then why wouldn't that person just say no as well?  Now that said, I doubt this scenario would present itself, because someone at some point will jump at the money.

And to the second point, I bet the amount of times United ends up shelling out $10k for displacing a passenger will be 0.  I'm sure they will start at a lower number and continue increasing it.  At some point someone will jump at the cash well before it hits $10k.  (I'd be surprised if it ever goes above $5k.)