United Airlines Shares Crash Following PR Crisis.

United Airline’s continuing failure to address the overbooking fiasco has hit the shares – and hard. In 24 hours, the airline lost around $250 million in market value – that’s a quarter billion Dollars – which shows the power of social media and how important it is to properly manage your PR.

Just in case you’ve been off the grid for a few days, here’s the gist: Following overbooking, a passenger – who happens to be a Doctor – was dragged – wounded and shouting – off a plane. Why? Because he refused to give up his seat on a United flight to Kentucky which was needed in favor of transporting crew members.

In a more innocent time of – before the internet came to be – that might have been the end of it. Perhaps a lawsuit, perhaps a quiet settlement, maybe a short article in the local newspaper. In the age of Twitter and Facebook though, the story exploded.

By Monday, videos of the incident recorded by random passengers went viral. United CEO Oscar Munoz could have mitigated the crisis with a full, clear apology. Instead he made matters much worse by kind of apologizing while accusing the passenger of being ‘disruptive and belligerent’.

By Tuesday #NewUnitedAirlinesMottos was trending on Twitter with colorful suggestions such as ‘Putting the hospital in hospitality’, ‘not enough seating, prepare for a beating’, ‘it’s really fight or flight with us’ and gifs featuring Harrison Ford screaming ‘get off my plain!”. Competitors were quick to take advantage. Southwest twitted a joke ad stating ‘we beat the competition, not you’. The event was also trending on Weibo – the largest Chinese social networking platform.

It was only after United’s share crashed – initially losing about $1 billion of market value – that the company seemed to realize the magnitude of the PR disaster and Munoz finally issued a decent apology, committing to investigating the incident and calling it (finally) ‘truly horrific’. The US Department of Transportation has also stated it’s reviewing the incident. Even the White House responded.

While it’s hard to say if and what impact the incident will have on the company’s shares in the long run, this is a great example of how important it is for a brand to handle such crises correctly in the social media era.

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