PHOTO: United might pay dearly after a video of a passenger being forcibly removed from an overbooked flight goes viral. (photo via Flickr/Oliver Holzbauer)
United Airlines is, literally, about to pay big as a result of the incident Sunday night in which a bloodied passenger was dragged down the aisle of one its planes after refusing to give up his seat.
Already struggling with its up-and-down stock price this week, United said it will compensate every one of the passengers on the flight for their ordeal equal to the cost of their ticket. United spokeswoman Megan McCarthy told CNBC Wednesday that the passengers can take the compensation in cash, travel credits or miles. There were approximately 70 passengers on the regional jet United was using, and at an average roundtrip price of $384 that’s almost $27,000 the airline has to eat.
More importantly, the victim, Dr. David Dao, has begun legal proceedings that could cost the airline even more.
Dao was one of four passengers chosen to give up their seats so that airline crew members could be in Louisville by Monday morning for new assignments. Flight 3411 originated from Chicago and was the last flight to Louisville until 3 p.m. Monday, and none of the passengers were enticed to be re-booked even by $1,000 in compensation and an overnight hotel stay.
When UA then chose four passengers to be removed, the shocking video emerged of Dao being dragged down the aisle, bleeding from the mouth, by law enforcement authorities.
In the wake of the incident, the outrage has been palpable, both on social media and Wall Street. The stock has been jumpy through the first three full days of trading this week. At 2:50 p.m. on Monday the stock was at a high of $72.05; by Tuesday morning United had lost almost $1 billion as it dropped almost $4 a share to $68.
As of the opening bell this morning it had climbed back to $69.39 a share.
"Overall, we think demand for UAL flights are unlikely to be affected by this poor customer service incident," airline analyst Jim Corridore from CFRA wrote in an investor’s note, according to Fortune.
READ MORE: United PR Disaster Isn’t Going Away For A Long Time
That doesn’t mean the bumpy ride is over.
MarketWatch writer Brett Arends noted today that United must disclose CEO Oscar Munoz’s annual bonus when it files its quarterly proxy statements in the coming weeks. Munoz’s bonus is expected to be $13 million, prompting Arends to note that it will only add to this current public relations disaster by the airline. He urged United to defer the bonus to a later time.
In the meantime, Dao has begun the legal process that could eventually lead to a lawsuit.
His attorneys have filed an emergency "bill of discovery" against the carrier in Illinois State Court, asking that all evidence from Sunday night’s incident – videos, cockpit voice recordings, passenger and crew names, and more – be "preserved and protected." According to court papers, Dao "currently has no access to them and believes that serious prejudice" will take place unless he is given such access, suggesting that further legal action is to come.