United Airlines (NYSE:UAL) Pays a Big Price for Forcefully Removing Passenger, Sheds $255 Million

2849
united airlines overbooked flight

There is outrage everywhere following the video of United Airlines (NYSE:UAL) forcefully removing a Chinese man from one of their flights went viral. The video showed security personnel removing a middle-aged Chinese man forcefully from his seat, even though he had a valid ticket to fly. The incident happened last Sunday.

The airline had booked more tickets than the number of available seats, which led to the fiasco. The man was first asked to get down from the flight, but he denied, saying that he had to get back to home quickly. He was then dragged down from the flight, and in the process, got injured.

Protests in China and Everywhere Else

Passengers on the plane were seen taking photos and videos. The video quickly went viral on social media and was seen by hundreds of millions of people around the world. Criticisms began to pour in from all over, with many even going to the extent of commenting that they will never fly on United Airlines flights again. China lodged an official complaint saying the man was selected because he was an Asian.

Incidentally, United is a top carrier in China and the company has a lot to lose. Millions of people read the report in the country and criticized the incident. Many Chinese people, just like the Americans are asking for a total boycott of United Airlines.

The White House also got involved. Press secretary Sean Spicer said the videos were “troubling”. However, he dismissed calls for a federal investigation, saying this is a “very simple local matter”. The US Department of Transportation, though, has said they will be looking into the matter.

The United Airlines Stock Plunges, Losing Close to a Billion Dollars

The United Airlines stock nosedived after the incident was reported and the criticism all over social media, wiping out an estimated $255 million of the airline’s market value. It was down by 1.1%, to $70.71 for each share, and in fact, at one point, it went down by as much as $3.16 or 4.4%, wiping out $994.2 million in market capitalization. However, it recovered a bit later and went up by 1.13% as there was support at the lower price.

Hit hard, Oscar Munoz the CEO of United Airlines (NYSE:UAL) issued an apology, acknowledging the “outrage, anger, disappointment”. However earlier, he had sent a letter to the crew who were involved in the incident, and credited them for what he says was “following established procedures”.