SERVICES MARKETING

Group Assignment- Term 4

UNITED AIRLINES’ SERVICE-RECOVERY CHALLENGE AFTER

REPUTATION MELTDOWN

Submitted by GROUP 3(PGXMP16)

1) Natarajan. S- XP21010
2) Praveen Sharma- XP21009
3) Kulwant Singh- XP21004
4) Manikandan. S- XP21003
5) Kanishka V- XP21024
6) Seejoe George- XP21030
1. Complete a root cause analysis to identify the problems associated with
the service failure in United Airlines flight 3411

Air travel is a price-sensitive industry; flying with empty seats is a

significant revenue loss for any airline company. The primary reason for the
empty seats are last-minute cancellations and missed flights by the
passengers. These incidents leave the airline little or no time to resell the
vacant seats. To avoid having to fly with empty seats, most airlines oversell
and overbook flights. This strategy depends on the estimated number of
cancellations and no shows. Airlines use specialised software to analyse
historical data, routes, time of day, seasons, ticket prices, and passengers
with refundable tickets to calculate the number of customers who will show
up for the flight. In case of a miscalculation and there is a surplus of
customers, according to U.S. Department of Transportation (DOT), the
airline can first request volunteer passengers who are willing to be re-
booked on a later flight with compensation to leave the overbooked flight.
If few or no passengers are willing to deny boarding, the airline is allowed to
randomly select passengers to involuntarily deny boarding and compensate
them as specified by DOT regulations. The DOT exception is for
unaccompanied minors and passengers with disabilities. The airlines may
choose to make an exception for frequent flyers. Instead of choosing larger
aircraft to accommodate the increase in demand, many airlines only
increased the number of seats in the regional planes. This decision, coupled
with overbooking practice, led to an increase in flight fares while keeping
the supply of seats short.

On the day of the event, United Airlines flight 3411 needed to fly four of its
staff members to a connecting destination and needed four passengers to be
moved to another flight to free up the seats. After boarding the flight, the
crew announced that they wanted four passengers to leave the flight
voluntarily and offered $400 vouchers for future travel on United, a hotel
stay, and a seat on a plane leaving more than 21 hours later. When there
were no takers, United’s crew raised the offer to $800 as compensation, but
no passenger was willing to deplane. The airline then announced to the
passengers that a computer algorithm would randomly select four
passengers to leave the flight exempting frequent fliers and high fare-paying
passengers. So, the airline decided to disembark four random passengers
and forcibly drag out a passenger who refused. One of the four randomly
selected passengers was a 69-year old doctor who refused to deplane
because he needed to attend several patient appointments the following
day. When the doctor refused to leave, the Chicago aviation officer forcibly
dragged him out of the aircraft, leaving him bloodied and bruised. The
footage recorded by co-passengers went viral on social media. The company
remained mostly unresponsive for two days after the incident. Social Media
uproar led to Oscar Munoz, United’s chief officer, issuing an apology.

According to the DOT, the airline was within the law to involuntarily move
the passenger to another flight in case of overbooking and allowed Airlines
to determine their own fair boarding priority lists. United admitted and
apologised for the overbooking flight 3411 which led to the forcible removal
 of the passenger. The Chicago Department of Aviation later announced that
the officer involved in the incident was suspended since he failed to follow
standard operating procedures.

The United’s delay in response to the issue, reluctant to offer a complete

apology, attempting to downplay the incident instead of being sensitive to
customers and showing a willingness to rectify the problem has led to
project a callous and dismissive company image.

2. Suggest service recovery measures to appease the passenger.

Oscar Munoz, United’s chief executive officer, should promptly talk directly
with the passenger and issue a press release personally apologising for the
incident taking full responsibility by being sensitive to the issue and show a
willingness to rectify the problem. In addition, United should offer a just
monetary compensation to the passenger due to the gravity of the incident.

The managerial attention will produce the highest level of customer

satisfaction more than freebies, discounts, and monetary compensation.

3. Finalise an action plan to prevent such incidents in future.

United should try to rectify a service failure and satisfy an aggravated

customer. The airline should promptly address the customer’s issue as soon
as something goes wrong. A managerial person should speak with the
customer immediately, ask for forgiveness, review the incident with the
customer, take full responsibility expressing a level of concern, be sensitive
to the issue, show willingness to make amends without downplaying the
incident.

Also, Employee appraisals and promotions should be linked to customer

satisfaction. The internal policies and procedures should be reviewed
focussing on customer satisfaction, the best alternative should be found,
and the related customer should be updated on the steps taken to rectify
the respective issue. The record of the complaints and problems should be
maintained and train staff members to handle similar issues that may occur
in the future.