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The United Airlines boycott is not backing down ' here's how it could affect sales (UAL)

Published by Business Insider on Tue, 18 Apr 2017


United Airlinesis in the middle of a PR nightmare.In case you missed it, on April 10, a video showing police officers dragging an Asian male passenger off a flight went viral. The airline reportedly needed room on the overbooked plane to move crew for another flight. When it couldn't find enough volunteers, United selectedthe 69-year-old man,Dr. David Dao, and several other passengers to deplane.Dao refused, and aviation officers dragged him down the aisle and off the flight.Helaterwent to the hospital for non-life-threatening injuries to his face.Some people are now threatening to boycott the airline, using the hashtag #BoycottUnited(which has over 3.5 million impressions on Twitter).The research firm YouGov has also been tracking consumer perceptions of United every day since July 2016. It asked consumersto give the airline a likeability score from -100 to 100, with zero being neutral.In a survey of 4,800 different people daily from April 9to 16, Unitedscore plunged from 1.8to -64.Despite the backlash, the incident and boycott will likely not greatly impactUnited's sales,Erich Joachimsthaler, CEO of the consultancy firm Vivaldi, tells Business Insider. He notes thatthe airline has a monopoly over certainroutes, so many travelers will have no choice but to fly United. Those whobuy flights through third-party discount sites, like Kayak or Expedia, will also likely want to get the cheapest tickets possible, even if it's through an airline they dislike."If you live in Charlottesville, Virginia, you simply have no other way to go to LaGuardia [in New York City] unless you fly United,"Joachimsthalersays.The monopoly over flight routes is part of a calculated strategy by United, and islargelya product of its2010 merger with Continental Airlines,headds. Due to the consolidation, United is able toreducecompetitionwhile increasing fares. This isn't unique to United either ' a dozenmajor airlines have merged in the past 12years, and today,80% of America'sair traffic is dividedamong four mega-carriers: American, United Airlines, Delta Air Lines and Southwest Airlines.Joachimsthalersays people are reacting strongly to the video, because most travelers can identify with Daoeven if they've never been personally dragged off a flight. The videotaps into consumers' growing dissatisfaction with airlines' declining service standards, like charging additional bag fees or overbooking flights."This is not about overbooking. I think the incident is about airline bullying," he says. "We have all experienced airline bullying in one form or another. In this case, the airline bullying not only went way out of control, it also happened with an airline that has a history of real customer service problems. It's an issue that has come to the forefront of American travelers' minds."Though the United incident may not hurt the airline's sales,Joachimsthaler predicts that it will still have ripple effects that could make the airline less efficient on a daily basis."The NPS ratings will continue to go down and spiral, and now consumers will be extremely sensitized for anything that will occur on flights," he says.United CEO Oscar Munoz responded to the incident by calling Dao "disruptive" and "belligerent," butapologizeda day later.Joachimsthalersays this was the wrong responsebecause it treats the incident as a PR crisis rather than a systemic issue within United."It reinforces United's posture of having a do-nothing attitude and that they are just providing lip service to the press," he says. "And even though they are being punished thanks to social media and iPhones, they are not suffering the harm, because it will not affect sales ' not even in the short term."SEE ALSO:The White House is now required to address the United Airlines incident due to this petition by an 18-year-old studentJoin the conversation about this storyNOW WATCH: UNITED PASSENGER ATTORNEY: Dao has a concussion, broken nose, and lost two front teeth
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