United Airlines stock plummeted by over $800mn after passenger fiasco
The stock price of United Continental Holdings Inc. fell dramatically for hours on Tuesday amid the fallout over the airline’s handling of a passenger being dragged off one of its US flights.
At one point, the stock value dropped to the tune of over $800 million.
The company’s stock price opened at $70.15 Tuesday as the markets were largely unmoved by the scandal on Monday. However, it later plummeted to $68.37, a fall of more than 4 percent, before climbing again to close at $70.71.
The market drop follows an incident in which a United passenger was forcibly ejected from an overbooked flight from Chicago to Kentucky.
Footage shot by other passengers showed the man screaming and struggling as airport police removed him from his seat and pulled him down the aisle of the aircraft. Later videos showed him back on board the aircraft with a bloodied face and appearing disoriented.
The airline came in for widespread criticism over the incident online with social media users expressing disgust at how the passenger was treated and pledging not to fly with United again.
The incident was particularly poorly received in China where people claimed that the man was discriminated against because he appears to be of Asian descent. The video was the top trending item on Chinese social media site Weibo on Tuesday.
That "re-accommodation" has cost Untied more than $900,000,000 in market value. pic.twitter.com/AN08oifTok— Sven Grundberg (@svengrundberg) April 11, 2017
In a letter to employees United Chief Executive Officer Oscar Munoz said that the passenger had "defied" security officers, Reuters reported.
“We sought volunteers and then followed our involuntary denial of boarding process (including offering up to $1,000 in compensation),” Munoz wrote. "When we approached one of these passengers to explain apologetically that he was being denied boarding, he raised his voice and refused to comply with crew member instructions.”
By market close on Tuesday, the airline’s fortunes had improved somewhat, with its share price reaching 70.71, an overall drop of 1.1 percent.