HOUSTON - By the time the markets closed Tuesday, United Airlines had survived another turbulent day, a bumpy ride that saw company stocks fall 1.1 percent and wipe out $255 million in company value.
People in Houston are paying close attention. United is Houston's third-largest employer and employs 15,000 people.
"This is definitely a big hit to the company," said Anastasiya Zavyalova, Assistant Professor of Strategic Management at Rice University.
Zavyalova says investors punished the company for mishandling the crisis. A crisis centered around cell phone videos that capture the horrific moment when a paying a passenger was forcibly and violently removed from a flight to make room for United crew members.
"Everyone is disturbed by what they saw," said one passenger on the flight.
Millions around the world were disturbed, too.
"It gives me goosebumps still and I've seen this video at least 10 times today," Zavyalova said.
Zavyalova says United CEO Oscar Munoz and his team underestimated the power of social media and only made the crisis worse with his initial response calling Dr. David Dao "disruptive and belligerent."
"Not expressing a sincere apology or at least sympathy with the victim of this case is probably another situation that should have been handled differently," Zavyalova said.
The plunge in the markets likely forced United to course correct. By the end of the day, the company had issued an apology to the customer and promised an investigation be completed by the end of the month. But Zavyalova says for airlines public perception is everything. And right now, when the public thinks United, they think about the video.
"It has a big market share so it won't be bankrupt because of this, but I hope for the rest of the airline industry, it will be a lesson learned how to handle a crisis like this," Zavyalova said.
And now United competitors are pouncing trolling the airline online. Royal Jordanian Air is reminding passengers "dragging strictly prohibited," and Emirates tweeted "fly the friendly skies with a real airline."
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