United CEO takes apology tour to investors
AERO
• United Airlines Chief Executive Officer Oscar Munoz, pivoting from a public apology to face investors, assured Wall Street that the carrier would rebound from the uproar that followed the dragging of a passenger off one of its planes.
“This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the centre of everything we do,” Munoz said in a statement Monday. “We are dedicated to setting the standard for customer service among U. S. airlines, as we elevate the experience our customers have with us from booking to baggage claim.”
The comments were the CEO’s first to investors since the April 9 incident, when security officers forcibly removed David Dao from a flight after he refused to give up his seat to make room for airline employees. Munoz, who also announced a firstquarter financial performance that topped expectations, is trying to maintain momentum for his plan to catch up to Delta Air Lines Inc. and American Airlines Group Inc. in profitability and operational performance.
“United said the right things regarding its need to upgrade its customer service and should be able to move past its PR nightmare,” Jim Corridore, an analyst at CFRA Research, said in a note to clients in which he reiterated a “strong buy” rating on the shares.
The shares rose 1 per cent to US$71.45 after the close of regular trading in New York. The company plans to hold a conference call Tuesday to discuss the financial results.
Munoz’s sober tone contrasted with a better- thanexpected financial performance. Adjusted earnings of US41 cents a share beat the US38- cent average of analyst estimates even as higher fuel and labour costs caused profit to fall from a year earlier. Sales were US$ 8.42 billion, topping the US$ 8.38 billion that analysts anticipated.
Passenger revenue f or each seat flown a mile will rise by 1 per cent to 3 per cent in the current quarter, the Chicago- based airline said. That would be the first increase since the first three months of 2015.
Domestic capacity will climb by as much as 5.5 per cent in the second quarter while total capacity will rise by a maximum of 4 per cent, United said.
The CEO’s initial reaction drew scorn worldwide last week when he called the incident “upsetting” and apologized for having to “reaccommodate” the passengers who were asked to leave the plane. Hours later he told employees that Dao had been “disruptive and belligerent” after being asked to leave the plane, based on early reports.
Dao suffered a concussion, broken nose and two lost teeth, and “probably” will sue the carrier, his lawyer, Thomas Demetrio, said at a press conference last week.