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United Airlines loses $1B in market value after man dragged off flight

CHICAGO – Shares in United Airlines slipped by close to 3% Tuesday as the company scrambled to address a video showing a passenger being forcibly dragged off a flight.

United Continental Holdings weathered the initial waves of anger caused by the video on Monday, with shares closing with a 0.9% gain. But momentum shifted by Tuesday morning.

Earlier in the day, the stock was even lower, knocking off close to $1 billion off the company’s market value. By the afternoon, the stock had recovered from the worst losses — but its market value was still off by $600 million.

The video, which surfaced Monday, showed a passenger removed on Sunday from United flight 3411 at Chicago O’Hare International Airport.

Several passengers recorded the incident on their phones and posted video on social media showing three Chicago Department of Aviation security officers dragging the man, who has not been identified, down the aisle by the arms and legs while other passengers shout in protest.

He continued to resist after he was removed and ran back onto the airplane, face bloodied from the encounter.

The incident sparked a massive reaction online.

Following the backlash, United CEO Oscar Munoz issued a statement calling the incident “upsetting” and apologized “for having to re-accommodate” customers.

But that failed to appease many customers. Public relations analysts have also panned the company’s public response to the incident.

Anger was not limited to the U.S. The incident was the number one trending topic Tuesday on Weibo, China’s answer to Twitter, attracting more than 100 million views.

China is one of United’s most important growth markets.

The Chicago-based carrier is the U.S.’s third-largest airline by passenger traffic, operating more than 4,500 flights a day to 339 airports across five continents.

United released its traffic figures for March on Monday afternoon, reporting 3% growth over the previous year.

The company has been trying to revamp its image after ranking near the bottom of airline customer satisfaction indexes for several years. It is updating its fleet and last year added free snacks, premium coffee, better Wi-Fi and upgraded airport lounges.

“Not Overbooked”

The United Airlines officials reportedly backtracked Tuesday morning by stating the flight was not overbooked, USA Today reported.

“United spokesman Jonathan Guerin said all 70 seats on the flight were filled, but the plane was not overbooked as the airline previously reported. Instead, United and regional affiliate Republic Airlines, which operated Flight 3411, decided to remove four passengers from the flight to accommodate crewmembers needed in Louisville the next day for a “downline connection.”

“They were considered ‘must-ride’ passengers,” Guerin told the news site.