United Airlines parent company’s shares drop over video of passenger being dragged off flight
United Continental Holdings’ market cap was wiped off around $255 million on Tuesday.
Shares of United Airlines’ parent company United Continental Holdings fell on Tuesday by nearly 6% before ending the day 1.1% down, after a video showing a passenger being forcibly dragged off a plane surfaced online, reported MarketWatch. UAL’s market cap was wiped off around $255 million (approximately Rs 1,610 crore) and at the end of the day it was at $22.5 billion (more than Rs 1,42,000 crore.
United’s shares had traded 0.9% higher on Monday and added around $200 million to the company’s market cap, reported The Guardian. However, after the airline footage went viral, on Tuesday, UAL’s shares was among the major losers in the S&P 500, CNBC reported.
The airline on Sunday had selected four people to give up their seats on its overbooked flight from Chicago to Louiseville. While three of them had obliged, Dr David Dao, the man seen in the video, had refused to leave as he said he had to see patients the next morning in Kentucky. Chicago policemen had then dragged him out of his seat and through the aisle, even injuring him. The video of the incident had sparked massive outrage.
United Chief Executive Officer Oscar Munoz (pictured above) in an email to his team on Monday had defended his employees and claimed Dao turned “disruptive and belligerent”. Munoz had apologised for the “overbook situation” and for having to re-accommodate the passengers, but he had not apologised for the incident.
However, when their stocks took a hit on Tuesday, Munoz issued a second statement where he acknowledged the incident to be “truly horrific”. “No one should ever be mistreated this way,” Munoza admitted, according to The Guardian. He said the company would “fix what is broken so this never happens again”.
Meanwhile, the White House press secretary Sean Spicer on Tuesday said it was disturbing to see “another human being is treated that way”. “...Don’t think there’s a circumstance that you can’t sit back and say this probably could have been handled a little bit better, when you’re talking about another human being,” he told reporters.