Sunday 5 July, 2020

United Airlines stock plunges $1.4 billion after passenger-removal controversy

Shares of United Airlines fell as much as 6.3 per cent in pre-market trading, dropping $1.4 billion from the now $21 billion company by market cap, Fortune reported.

By early trading Tuesday, shares were down 4 per cent.

Video shows three security officials dragging a male passenger from a United Airlines flight that the airline said was overbooked on Sunday - as it waited to depart from Chicago's O'Hare International Airport.

The passenger was later identified as physician David Dao, 69.

CEO Oscar Munoz on Tuesday, issued his most contrite apology yet as details emerged about the man seen on cellphone videos recorded by other passengers on flight 3411.

United's 4 per cent drop Tuesday could also be an overreaction to the sheer volume of negative sentiment and press surrounding the airline, at least according to CFRA's analyst Jim Corridore, the Fortune report stated.

Corridore noted that while the airline has the right to refuse boarding to any passenger, for any reason, the United handled the situation in a deplorable fashion.

Meanwhile, Chicago Mayor Rahm Emanuel called the way Dao was treated "completely unacceptable" and praised Aviation Commissioner Ginger Evans for taking "swift action." He promised that a city investigation would "ensure nothing like this ever happens again."

The event stemmed from a common air travel issue — a full flight. United was trying to make room for four employees of a partner airline, meaning four people had to get off.

At first, the airline asked for volunteers, offering $400 and then when that did not work, $800 per passenger to relinquish a seat. When no one voluntarily came forward, United selected four passengers at random.


Three people got off the flight, but the fourth said he was a doctor and needed to get home to treat patients on Monday. He refused to leave.

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