United raising limit on payments to bumped flyers to $10,000

DALLAS (AP) - United Airlines moved to staunch criticism - and any customer defections - by reaching a settlement Thursday with a passenger dragged off one of its planes two weeks ago and issuing new policies designed to prevent similar customer-service failures.

On April 9, Kentucky physician David Dao was forcibly removed from a flight after refusing to give up his seat to a crew member. The incident ignited a debate about poor service and a lack of customer-friendly policies on U.S. airlines.

United and lawyers for Dao declined to disclose financial terms of the settlement Thursday. Earlier, United announced steps it would take to reduce overbooking of flights. Among other things, the airline said it will raise the limit on payments to customers who give up seats on oversold flights to $10,000, and it will improve training of employees.

Dao's lead attorney, Thomas Demetrio, praised the airline and its CEO, Oscar Munoz, for accepting responsibility and not blaming others, including the city of Chicago, whose airport security officers yanked Dao from his seat and dragged him off the United Express plane.

Dao never filed a lawsuit against United, but Demetrio had said legal action was likely.

Dao was waiting to fly to Louisville, Kentucky, an April 9 when the airline decided it needed four seats for Republic Airline crew members who needed to travel to work another United Express flight in Louisville the next morning. When Dao and his wife were selected for bumping, he refused to leave.

Video of the incident has sparked more than two weeks of withering criticism and mockery of United. Munoz initially blamed Dao, but later said he was horrified by the event and called it a failure on United's part.

On Thursday, United released a report on the incident that outlined new policies to prevent a repeat. The airline vowed to reduce, but not eliminate, overbooking - the selling of more tickets than there are seats on the plane.

United won't say whether ticket sales have dropped, but the airline's CEO acknowledged the Dao incident could be damaging.

"I breached public trust with this event and how we responded," Oscar Munoz told The Associated Press. "People are upset, and I suspect that there are a lot of people potentially thinking of not flying us."

To head off customer defections, United had already announced that it will no longer call police to remove passengers from overbooked flights, and will require airline crews traveling for work to check in sooner. On Thursday, it added several other new policies including:

- Raising the limit on compensation to $10,000 for customers who give up their seats starting Friday. That is a maximum - it's unclear how many, if any, passengers would see that much. The current limit is $1,350. Delta Air Lines earlier this month raised its limit to $9,950.

- Sending displaced passengers or crew members to nearby airports, putting them on other airlines or arranging for car transportation to get them to their destinations.

- Giving gate agents annual refresher training in dealing with oversold flights. Munoz said he also wants agents and flight attendants to get more help at de-escalating tense situations.

While not a factor in this month's incident, United also said that starting in June it will pay customers $1,500 with no questions asked if the airline loses their bag.

For United, the timing of the viral video could hardly have been worse. The airline struggled badly after a 2010 merger with Continental, enduring several technology breakdowns that angered customers. In the past year, however, the airline has flown more on-time flights and lost fewer bags. It recently rolled out plans for expanding service this summer.

Instead of being commended for those signs of progress, United has been pilloried. Munoz apologized again and faulted his own initial response, in which he defended airline employees and called Dao belligerent.

"That first response was insensitive beyond belief," Munoz said. "It did not represent how I felt," saying that he got "caught up in facts and circumstances" that weren't initially clear, instead of expressing his shock.

United said it will reduce overbooking, particularly on flights with a poor track record of finding volunteers to give up their seats, but won't end the practice. Munoz said if airlines can't overbook there will be more empty seats and fares will rise.

Earlier Thursday Southwest Airlines, which bumped the most passengers off its planes in 2016, announced plans to stop overbooking flights, citing the United incident as a catalyst.