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United Airlines: using a compliance framework to further customer relations

Tom Fox | May 2, 2017

United Airlines made it through the week without any new or additional public relations disasters. That must come as some relief given the airline’s most recent couple of weeks. United managed to settle the claim brought against it by the passenger it had forcibly removed from a flight and revamp its procedures to give more flexibility to company personnel to deal with future oversold situations or when airline passengers need to be ferried and are given priority over paying customers. It is this second set of actions that speaks directly to the final prong of any best practices compliance program, remediate.

United followed the prescripts of the Justice Department’s Evaluation of Corporate Compliance Programs, Prong 1 by performing a root cause analysis of the failure. The ensuing report listed a litany of failures of internal controls that contributed to the removal of the physical removal of the passenger. United changed its internal procedures to reduce the number of overbookings, require non-paying United personnel who want access to a flight to arrive at the gate at least one hour before the flight, using metrics to determine which flights are more often prone to overbooking and give gate personnel more flexibility in dealing with such situations going forward. In an eye-popping move, United announced that gate agents could offer up to $10,000 as compensation for a passenger to voluntarily give up a seat. These are all modifications to the company’s internal controls that guide its relationships with its customers.

The three prongs of every compliance program are prevent, detect, and remediate. When there is a compliance failure, such as the one engaged in by United, a key issue is what does a company do to fix the problem. This is where the compliance professional steps in with a role separate and apart from the corporate legal function, which exists to protect the organization. Yet, here the company used the information that led to the compliance failure and incorporated remedies to prevent similar incidents in the future.

By incorporating the lessons it learned from this sordid episode and if United follows through with these changes they have announced, the company will go a long way toward repairing its customer relations.