Sufficiently Contrite United CEO Passes Test on Capitol Hill

Oscar Munoz at his recent Senate hearing

Oscar Munoz looks to have learned some hard lessons about apologizing, saving him from following in the footsteps of some other scandal-plagued CEOs who made their situations even worse in Washington.

Weathering a grilling in Congress would be a tough ask for anyone and Munoz looked understandably nervous in the hot seat yesterday. After all, United’s decision to violently remove a paying passenger to make way for its own staff—and Munoz’s unrepentant initial response—had made him the whipping boy for simmering public frustration over the entire industry’s service standards.

Faced with a similarly-testing situation last year, former Wells Fargo CEO John Stumpf floundered. He didn’t appear to show genuine contrition, resembling, in the words of Yale senior associate dean Jeff Sonnenfeld, “a deer caught in the headlights”.

Mylan CEO Heather Bresch didn’t prepare well for her hearing either, blaming rising business costs and regulation for the company’s decision to rapidly increase the price of its EpiPen injection product more than five fold. At one point, Bresch understated the amount of profits the company made on each EpiPen, forcing it to release an embarrassing clarifying statement after her hearing.

To Munoz’s credit, he came prepared—with detailed and meaningful information about what United was doing to fix the problem. And he came with apologies. Lots of them.

“It was a mistake of epic proportions, clearly, in hindsight,” he told the House, while saying sorry to the injured passenger, the passenger’s family, other customers on the flight, the airline’s customers in general and United’s employees.

“Further, I’m personally sorry for the fact that my immediate response and the response of our airline was inadequate,” he said. “In that moment for our customers and our company we failed, and so as CEO, at the end of the day, that is on me.”

Munoz also outlined four ways in which the airline had failed, including:

1. Calling on law enforcement when a safety or security risk did not exist. “That should never happen. Period,” Munoz said.

2. Rebooking crew at the very last minute. “We created a situation of our own doing that we should never have done,” he said.

3. Not offering enough compensation to incentivize customers to give up their seats.

4. Not giving its employees enough authority to do the right thing.

Munoz added: “This is a turning point for United and our 87,000 professionals. It is my mission to ensure we make the changes needed to provide our customers with the highest level of service and the deepest sense of respect.”

His words may ring a little hollow, given his failure to issue a convincing apology in the first place, at one point calling the injured passenger, who refused to leave the flight, “belligerent”.

Still, airline stocks, including United’s, soared yesterday, indicating investors were happy enough with Munoz’s performance. Rival carrier Delta also had released some upbeat traffic figures, while lawmakers, although clearly angered during the four-hour hearing, stopped short of airing any immediate plans to introduce heavier regulations.

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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