Friday, April 14, 2017

United Airlines, the Law, and Company Culture

By now, I am sure virtually all of our readers have heard about the United Airline issue involving the dragging of a passenger off the plane.

If not, you can catch up here, here, and here. And you can watch the viral video here.  

Shortly following the incident, United Airlines stock dropped sharply, losing hundreds of millions of dollars of value. (Of course, it is difficult to tell how much of this drop is related to the incident).

The CEO of United Airlines' first public statement was tone deaf at best. He wrote, "I apologize for having to re-accommodate these customers" when better terms would have been "unacceptable" and "immediate corrective procedures." There is not evidence that they "had" to remove passengers; they removed passengers because they wanted to transport some of their employees on that flight. The internal e-mail to the corporation's employees was no better, calling the passenger "disruptive and belligerent."

My social media feeds, which include many lawyers and legal academics, are full of debate over whether United Airlines acted within the bounds of the law and their terms & conditions. While this is an interesting discussion, I think it is largely beside the point in this case. Regardless of whether United Airlines was legally correct, they surely could have handled the situation better (by offering more money for volunteers to go on a later flight, by explaining the terms of the deal better, by having their employees transported in another plane, etc.)

United Airlines is already paying a heavy public relations price. One thinks they would have learned from the United Airlines Breaks Guitars incident that went viral a few years ago and which I use in my negotiation classes every year.

After this incident, I just kept thinking how unlikely it would be for something like this to happen at Southwest Airlines. Southwest Airlines has a famously great company culture. See here, here, and here. Their employees always treat me significantly better than any other airline employee I have dealt with on my travel. Southwest Airlines is not perfect--I don't love their odd boarding procedure, for example---but they do strive to treat their consumers and their own employees extremely well, not just as poorly as the law will allow.

Southwest Airlines' company culture has also translated to remarkably reliable profits. Perhaps United needs to take notes.

Note: This appears to detail the rights of passengers who are denied boarding (up to $1,350) that many in the media are citing, though one can wonder whether this applies since the passenger in question had already boarded.

Update: This is the type of thing Southwest Airlines has become known for - turning a plane around so that a woman could be put in touch with her husband about a head injury their son had sustained. And booking her on the next flight, for free. 

http://lawprofessors.typepad.com/business_law/2017/04/united-airlines-the-law-and-company-culture.html

Business Associations, CSR, Current Affairs, Haskell Murray | Permalink

Comments

I was on a two-days' delayed Delta flight when the United incident occurred. My immediate analysis involved checking to see if Southwest had a later Sunday evening flight to Louisville out of Midway. Yep. Whether four seats were available on SWA I do not know, but it would have been worth an inquiry by United. Having flown from Chicago to Louisville on private aircraft frequently (I miss Meigs Field), I know that the four United employees could have been flown the short hop on a prop-jet for a charter fee of $2,000 for the flight and deadhead return to Chicago. Finally, I note that in many jurisdictions the battery of a 69-YO constitutes elder abuse and merits an enhanced sentence.

Posted by: Craig Sparks | Apr 14, 2017 8:11:03 AM

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