United Airlines Case Study

Airlines has the power of removing the customers when the plane is overboard for which the passengers give an acceptance while purchasing the ticket. Employees followed the protocol on the flight and explained the whole condition to David and reported that prior to his removal, he was asked politely to leave the plane but then due to the denial he was handled with aggressiveness due to which he got hurt on the head.

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People took this assault very seriously and gave derided remarks for the staff members of the airlines. This created a sense of negativity in the mind of the passengers and all the persons who got to know about this incident. People even cut their united credit cards and posted the image online which impacted the goodwill and market share of United Airlines. Market position of the airlines went drastically low after the incident and this violent remotion resulted in plunging $1 Billion in the market value and two security officers were fired. In an internal meeting with employees following the incident, the CEO Oscar Munoz told that the employees followed the said procedures for dealing with these kind of situations. He also states that there are lot of things a person can learn from this incident and also promised to look at the circumstances that surround the incident.

ISSUES:

During this case United Airlines of America faced some issues. Some issues involved with United Airlines:

• Bad Behaviour: In the incident the staff of United Airlines was involved in rude and bad behaviour towards the passanger, this deteriorated the image and goodwill of the airlines and resulted in loss of market position. As this was posted online by a passenger named Tyler Bridges because of which the airline lost the trust of the customers due to the sympathy for David Dao.
• Lost Market Value: Due to incident that happened by the employees of United Airlines, The passengers who travelled a lot in the airlines boycotted the travel with United Airlines which resulted in loss of market value and deterioration of Market Position. The company falled down by $1 Billion which resulted in very low market share.
• Controversies: This incident resulted in controversies and for which the airline was very much in limelight and due to this the airlines lost it's value and resulted in loss of market position and Negative image in the market. The airline was at an edge of closure because of the deteriorated goodwill and the worse conditions.
• Breach of Policies: Tyler reported that there was a breach of terms and conditions by the airlines. As the flight was not that overboarded just because of the need to fly tyhe staff members in the plane, there was a need to lay off some passengers and this then affected the goodwill of the company and damaged the profits of the airlines.
• Loss of Goodwill: Goodwill is an intangible asset for a company which is a source of revenue for the company. Goodwill ensure that the company is reputed and has a good image among the consumers and in the market. This incident of laying off the passenger forcibly resulted in a loss of image of the company. The incident resulted in loss of profits and the market position in the industry as the company lost it's goodwill after the airlines hurt the passenger while the procedure of laying off.

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Measures:

After the incident United Airlines had to raise funds to meet out the losses. United has raised funds manier times but this time the loss incurred was around $1 Billion. United airlines took some steps after which was very much necessary to stabalize the incident that created a mishappening for the company. The CEO of the company told in front of the media that this issue will be taken care of and informed that the two of the officers who handled the situation aggressively were fired and said there will be a revision of rules and regulations of the airlines and will take care of the mishap. The video that was uploaded by Tyler Bridges was then removed by the airlines forcibly. The $1 Billion loss in market value was recovered by the airlines gradually by the company. Now United Airlines is the third largest airline in the world. This is just possible because of the steps taken by the airlines like reducing the price, apologizing to the consumers, removing the posted video, Paying some amount to the victim as a compensation, firing the two security officers, etc. This issue had to be resolved because the company almost on the edge of bankruptcy. The company had no profits and huge losses and lost respect.