United Continental Holdings Inc. shares fell as much as 4.4 percent on Tuesday after a worldwide backlash erupted over a passenger who was dragged off one of the carrier’s overbooked U.S. flights.
Video showing a man who appeared to be Asian being snatched from his seat, his limp body pulled from the passenger cabin of United Airlines Flight 3411, sparked an outcry on Monday when the footage went viral.
On Chinese social media, the incident attracted the attention of more than 340 million users on the Weibo platform by Tuesday morning.
United Continental got about 14 percent of its 2016 revenue from flying Pacific routes.
“The company has a very black eye, and they need to do some PR work, but I don’t think it will have any effect on the fundamentals,” said portfolio manager Craig Hodges of Hodges Capital in Dallas.
Much of the backlash centered on whether the man would have faced the same treatment if his ethnic background had been different.
According to Tyler Bridges, a passenger who was on board the flight from Chicago to Louisville, Kentucky, the man who was dragged off before takeoff said repeatedly that he was being discriminated against because he was Chinese.
— wednesday (@proudwednesday) April 10, 2017
“He said, ‘I’m a doctor; I need to see patients,” said Bridges, a civil engineer from Louisville who recorded much of the incident on his phone.
Many Weibo users, including comedian Joe Wong and e-commerce company JD.com founder Liu Qiangdong, called for a boycott of United.
“This makes me recall the nightmare experiences I had the three times I flew with United Airlines,” Liu told his more than 3 million followers. “United’s service is definitely the worst in the world!”
In the United States, social media outrage continued, with the incident trending on Twitter for the second consecutive day. Many users promoted hashtags #NewUnitedAirlinesMotto and #BoycottUnitedAirlines.
Twitter user Ethan @Warbot2003 wrote: “We Put The Hospital In Hospitality #NewUnitedAirlinesMottos.”
Another Twitter user, Jim MacD @jim_macd, tweeted: “We can re-accommodate you the easy way… or the hard way #NewUnitedAirlinesMotto.”
In heavy trading, shares of United Continental had pared steeper initial losses by the afternoon but were still down 2.6 percent at $69.65. The decline shaved about $600 million from the company’s market value and made the stock among the biggest percentage decliners in the S&P 500.
Late on Monday, United Airlines had also reported its March operational results, saying it expected first-quarter consolidated passenger unit revenue to be about flat with a year earlier.
UBS analyst Darryl Genovesi said in a research note that the revenue projection “may be seen as a modest beat relative to investor expectations.”
United plans to report quarterly results next week.
The S&P composite 1500 airlines index was little changed after trading in negative territory earlier, while the broader S&P 500 declined 0.3 percent.
American Airlines Group shares rose 2.8 percent after the company raised its quarterly forecast for a key revenue metric.