United Airlines: Charting a Crisis...

Visual Capitalist  |

Via skinnylawyer & National Nuclear Security Administration

The people in Pepsi’s (PEP) marketing and PR departments must be relieved, because the internet’s viral outrage is finally being channeled in a different direction.

This time the fury is targeted towards United Airlines (UAL) – a brand that is in full-blown crisis mode after a bloodied passenger was forcibly dragged off a plane, and millions of people witnessed videos of the incident being spread over social media.

Two days into the crisis, here are some charts that will help give context around what happened, as well as the potential effect on the United brand itself.

Damage Done?

First, let’s take a look at what’s happened to United’s stock price since the incident:

While some public relations crises have minimal effects on the long-term financial performance of companies, this market reaction is an interesting gauge to consider.

The stock’s lowest point today was -4.3% below the open, which is equal to a nearly $1 billion loss in market capitalization. At that point, it was speculated that Warren Buffett’s Berkshire Hathaway (BRK.A), which owns 9% of all outstanding shares of United Continental Holdings Inc., could lose up to $87 million.

The market clearly saw the crisis as creating risk around United’s fundamental business, but the stock has mostly recovered since those intraday lows. That said, if there are reports of top line revenue being affected because of boycotts or other issues, then the incident’s impact on the stock price could easily re-surface.

Social Media Blowback

With today’s interconnected world, a public relations crisis can start with one tweet. Here’s the snowball effect in brand mentions of United that occurred on April 10th:

Courtesy of: Brandwatch

Here’s another look. This time, it’s a comparison of mentions over the last 21 days.

Courtesy of: Brandwatch

Yes, it’s only been about two weeks since United’s last PR crisis, called #LeggingsGate. As you can see, however, the most recent disaster is many times worse in terms of mentions.

With millions of references to the United Airlines brand occurring on social media, here is the split between positive and negative sentiment as of April 10th::

Courtesy of: Brandwatch

Denied Boarding Rates

But how big of a problem is making passengers deboard a plane, in the first place?

The next chart shows denied boarding rates, inclusive of voluntary and involuntary activity, from January to September 2016:

Data: U.S. Dept of Transportation

United and Delta are the two worst offenders here, with denied boarding rates that are worse than American, Virgin, Alaska, JetBlue, or Southwest.

Lastly, here’s the same figures, except contrasting voluntary vs. involuntary denied boarding rates from January to September 2016:

Data: U.S. Dept of Transportation

Southwest (LUV) and ExpressJet lead the way with the most involuntary denied boardings, and United Airlines is in the middle of the pack. However, in terms of voluntary denied boardings, United and Delta (DAL) have much higher rates than other major airlines such as American or Virgin.

Stock price data is provided by IEX Cloud on a 15-minute delayed basis. Chart price data is provided by TradingView on a 15-minute delayed basis.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Trending Articles

This ’Niche‘ IoT Sector Is Set to Boom
Which Industries Benefit the Most After a Hurricane?
The Currency Crescendo: What Happens When the Music Stops
As Streaming TV Users Push Back, Providers Ponder Their Next Move: Jeff Kagan

Market Movers

Sponsored Financial Content