On Tuesday, $800 million in total value was lost in total value, following the video of a man being dragged off a flight becoming a major news story.
During mid-morning trading, he company’s shares have declined by about 3.8%, which is a high decrease for a company in United’s stature.
On Monday morning, a video emerged of a man being violently dragged off a United Airlines flight, started the controversy. That United has found itself in. The man had been already seated on the plane when he was asked to leave as the plane had been overbooked.
The man refused to leave the plane, that’s when a Chicago police officer grabbed him and dragged him across the plane’s isle. United has been dealing with sharp criticism and severe backlash ever since.
United’s case is unique. For example when compared with Pepsi, another major company that has been involved in a major PR nightmare after its highly criticized ad, its stock hasn’t been affected at all.
This decrease in value shows how serious the situation United has found itself in. Despite airline travel’s reputation of not being on top of the list of quality consumer experiences, however, Monday’s video has sparked heated debates concerning the company, the airline industry as a whole, and police procedures.
Issues with the industry:
Also, Tuesday’s stock decline came as a surprise to several analysts and observers as it didn’t seem like investors were particularly worried when the controversy started on Monday.
Realistically speaking, Continental isn’t particularly in a tight spot as the company is worth a whopping $21.8 billion dollars.
However, the debate at the moment surrounds the airline industry as a whole, as after years of mergers and acquisitions, consumers have been left with little choice in airline when travelling.