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United CEO says no one will be fired after passenger dragged

22 April 2017

The passenger who was dragged off, Dr. David Dao, is a Vietnamese-American.

Yesterday, its shares have fallen 4.4 per cent since Flight 3411, wiping out almost $US1 billion in market value, although some other airline stocks also declined in the same period.

That's down from $313 million, or 88 cents a share, for the same period past year.

In a recent interview with industry publication Corporate Counsel, Hawaiian Airlines chief legal officer Aaron Alter said that there are important lessons to be learned from the current crisis of reputation facing United.

Munoz and other top airline executives apologized again for the fiasco on Tuesday before discussing the airline's latest financial results on a conference call with analysts and reporters.

The company has been embroiled in controversy ever since a video surfaced of Dr. David Dao being dragged off an overbooked flight in Chicago.

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Three staff members had been suspended over the incident.

After the incident triggered worldwide outrage, United Chief Executive Oscar Munoz apologized to Dao, his family and its customers, saying the carrier would no longer use law enforcement officers to remove passengers from overbooked flights.

In the wake of the incident, Munoz said he has reached out to members of the Chinese consulate in Chicago. He initially supported employees and blamed Dao, calling him "disruptive and belligerent".

"I'm sure there was lots of conjecture about me personally", said Mr Munoz, adding that he had the support of United's board. "There was never a consideration for firing an employee".

Dao's lawyers have taken steps that foreshadow a lawsuit against the airline and the city of Chicago, which operates O'Hare Airport, where the incident took place.

The incident on United Flight 3411 last week that sent the airline into an unprecedented public relations crisis hasn't caused it to downgrade performance expectations going into the second quarter.

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Munoz reiterated that United will make policy changes, including not using law enforcement to take passengers off a flight unless there is a security issue and requiring that crews be booked at least an hour before takeoff.

And some U.S. politicians have called for a total ban on overselling flights.

Even in normal times, airlines closely - even daily - scrutinize numbers such as advance sales and occupancy levels on planes.

According to the couple, who said they were en route to get married, a federal marshal had escorted them from the plane before take-off from Houston, Texas, but United denied this on Sunday, saying in a statement that neither a marshal nor other authorities was involved. United President Scott Kirby said, "We feel like we've managed that pretty well and our corporate accounts are largely supportive".

United Continental Holdings Inc reported sharply lower first-quarter earnings Monday. They did not ask United management any questions about it on Tuesday's call.

"United Airlines is a private, for-profit company relying on publicly financed infrastructure - and now, apparently, a public police force - to punish passengers", Blumenthal wrote.

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United beat analysts' forecasts of $0.38 per share and $8.38 billion in operating revenue by posting adjusted earnings of $0.41 per share and $8.41 billion in revenue.