IMC - Group 2

Artika Vats (M009-18)

United Breaks Guitars Alekhya K (M138-18)

Kaustubh Sawant (M178-18)
Nilesh Nannaware (M196-18)
Abhishek Gaikwad (M191-18)
 The Incident
• Carroll Dave, with his band, sons of Maxwell
while travelling from Halifax to Omaha, noticed
very rough handling of the cargo, while the
$3,500 guitar was also mishandled by the
baggage handlers.
• Upon sharing his concerns, Dave wasn’t
addressed well by the flight crew.
• The plea was heard only after about 7 months,
the claims being refused stating that the same
should have been made within 24 hours of
damage.
• After 15 months of continuous efforts to seek
compensation on July 6, 2009 he released his
first song with a blog post for reference of the
incident out of total 3 songs he promised.
• On July 8, 2009 United Airline paid Dave $1200
in cash and $1200 as vouchers to control the
situation
• But the song release earlier was already viral
and online & offline media help to publicize the
issue which negatively impacted the airline
• The share price was dropped by 10 % and the
shareholder of United Airline suffered a loss of
$180million
 About the Airline
Employees approximately
50000 employees & Around
3300 flights per day
Scored lowest on
American Customer
Satisfaction Index Among the largest
Airline Ranking for international airline in
1996-2009 United States

United Airlines was

• Filed Bankruptcy in 2002 with undergoing competitive
total loss of $3.21 billion. pricing and incremental fuel
• To cut down operation cost – cost
• Reduction in work force by 20%
• Renegotiation of salaries
• Outsourcing Maintenance Service
• Losses Reduced to $2.81 million
 United Airlines’ Response

 Presence on online and social media

 18 k Twitter followers
 Frequent tweeting of same sentence
 Compensation offering to Carroll
 $1200 Cash + $1200 in flight vouchers
 $3000 donation to a music school
 No replies to taunts of Carroll’s friends
 United Airlines’ Response

 Try to defuse the situation

 Love your client’s video. Not all r honest as
he. That is why policy asks for claims w/in 24
hours. No excuse; We’re sorry.
 Selective use of media to discuss the incident
 No use of website and YouTube channel to respond
to inquiries from journalists
 Posted message on Correll’s band’s YouTube was
deleted
 Acknowledgement to Correll about mistake of
claim denial

Written response to people who communicated

Main Issues
• The service delivery was not as promised

• The PR was poor handled

• Unrestrained bad reputation spreading virally

• Limited resources due to lay off

• Multiple stakeholders including customers,

competitors, media etc. have come into picture
 Aftermath
United Breaks Guitar
Dave Carroll United Airlines
Video

• Distribution • Showcased in • Stock price drop

opportunities & business mainstream channels • Cost shareholders $180
relationships • YouTube’s highest rated million
• Live performances music video • Customer Dissatisfaction
• 200 interviews • Surge in website traffic
• Stakeholder hearing & iTunes sales
• The Cable Song • Ranked No. 7 by Time
Magazine in Top 10 Viral
videos
Reputation Protection
1. Top Areas of Business Vulnerability
 Operational Failures, Inflight Services, Baggage Handling, After Travel Service

Rough handling of guitar On return to Omaha, he

noticed by band
members. Staff members
did not take
responsibility and
directed to lead
was asked to claim at Case was closed by
originating airport. United based on the 24
His complain calls were hour rule for reporting
rerouted several times. the damage.
 Reputation Protection – Continued
2. Early Signs of Emerging Crisis
 Customer Complaints at different
stages
 Multiple complain attempts
 Warnings from the customer
 Involvement of multiple stakeholders –
other customers, public, competitors,
media and other companies
3. Recovery Plan
 Monitoring all communications
 When to respond? - Quick response is key tool to avoid major
spread
 Who will respond? - Credible sources like top officials, celebrities
or regulatory certifications
 Where to respond? - Website and open public notes were used
by United
 Build on positives - United’s response to media quoting 99.95%
they delivered successfully
 Using complaints to their advantage - Promised to improve their
services
Links

https://www.youtube.com/watch?v=5YGc4zOq
ozo

http://www.youtube.com/watch?v=h-
UoERHaSQg

http://www.youtube.com/watch?v=P45E0uGV
yeg
Thank You