Wall Street Pays Little Attention To United Airlines Brouhaha

by Cheryl Rosen
Wall Street Pays Little Attention To United Airlines Brouhaha


Updated 4/18/2017 8:45 a.m.

Sure, United has taken plenty of heat in recent days. But it is not likely to be badly hurt by the sad tale of Flight 3411, says a Wall Street analyst in an article today entitled “Millennials Are All Sizzle And No Steak Concerning United Airlines' Incident,” by Joe Albano from SeekingAlpha.com.

“Millennials take to the internet in response to United Airlines' recent incident. The negative sentiment causes the stock to plunge. Wait - no it didn't. How can that be?” Albano asks. “It turns out the market is not fooled by millennial and media emotion. This incident will blow over for United without impact.”

Despite the You Tube postings and the calls for the head of its CEO, United has seen just a small blip in its stock price. And doomsday scenarios about losing the Chinese market seem ridiculous in hindsight, Albano said, as the customer in question was Vietnamese, not Chinese.

Still, there is clearly some work to be done at United, and the airline is taking its first steps in the right direction. United Airlines last week announced it is changing its employee travel policy in the fallout over the incident.

Travel agents with whom we spoke seemed to agree that all the hoopla will soon blow over.

While Yvette Shaqir, co-owner of the Travel Boutique, Co-owner / Sales & Marketing Director at The Travel Boutique LLC, "had clients refuse to book United directly after the incident, I imagine as the memory fades they will go back to United if it works for their itinerary," she said.

"I've only heard a few comments, but in the last five days, I've had 85 bookings on United...so...its still business as usual," said George Andritsakis, a senior travel consultant at AAA.

"My clients had absolutely no concern," agreed Rebecca Northcut Cummings, owner of WeGo Travel. "They understand the carriage contract and feel while United should have sorted this out prior to boarding, the event has been overblown. Business as usual for us."
 
And Margie Lenau, of Margie Lenau, Wonderland Family Vacations, reported her "clients don't even mention this incident. There have been other airlines that have gotten bad press for isolated incidents. I have never had anyone question any airline booking, except for schedule and pricing. I do take the time to go over requirements for each airline I book, so the client knows what to expect."
 
Betsy Bouche of Largay Travel Inc. summed it up this way: "United is just the 'flavor of the month.' In a few weeks another airline incident will go viral and passengers will hate them instead. In reality, most clients choose airlines based on who flies to their destination, price, frequent flyer points. The few times they've said 'don't put me on...' it never lasts.
 
Indeed, Roberta Westwood, cruise & vacation specialist at Expedia CruiseShipCenters in Sidney, British Columbia, noted one positive. Her clients now are more willing to pay for advanced seat selection.

United, meanwhile, said that as part of its “commitment to make this right,” it no longer will bump passengers from a flight to make room for crew members less than an hour before a flight is scheduled to take off.  Effective immediately, no crew member can replace a customer who has boarded an aircraft.

United announced the changes in an email to its staff.

“Effective immediately, Crew Scheduling is now only able to make must-ride deadhead [non-paying passenger] bookings on oversold flights if it is 60 minutes or more before the estimated time of departure,” the memo said.  “There will be no deviation from the policy above. No must-ride crew member can displace a customer who has boarded an aircraft.”

After the incident, United said in a statement that it was “going to fix what’s broken so this never happens again.” That included implementing a new policy that ensured it would no longer call law enforcement to remove passengers from flights unless it’s a matter of safety.

It also said it will start “a thorough review of policies that govern crew movement, incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement.”

And last, United said it will “fully review and improve our training programs to ensure our employees are prepared and empowered to put our customers first.”

Meanwhile, Albano suggested that reports about millennials boycotting United's services have been greatly exaggerated. “The problem here is millennials as a generation are loud, fickle, and irresolute. Our ability to make a case and stick to it is questionable at best and deceptive at worst. Events in most cases only impact us when we force the impact upon ourselves. Our real colors show a month later when things have settled down and the next hyped event takes center stage.

“Millennials won't remember which carrier it was months from now when they go to book their next vacation. There will be no impact from this incident to UAL's medium-term outlook. In fact, if the time frame isn't until June 2017, United will have plenty of time to erase this from the minds of consumers even if millennials somehow found the short-term memory antidote.”

 

 
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