United used the wrong channels of communication to handle the worldwide backlash it received over the treatment of a passenger who was dragged from his seat, Mohamed El-Erian, chief economic advisor at Allianz, told CNBC on Tuesday.
“What happened to United should come as a lesson to many corporations,” El-Erian said on “Squawk Box.” “Even if you lose control of the narrative, which United did early on, don’t make it worse. … It made a really bad situation a lot worse.”
The company faces intense pressure from the public and lawmakers and even a possible lawsuit after a video surfaced of David Dao, a 69-year-old Vietnamese-American doctor, being dragged off an overbooked United flight in Chicago.
After a series of poorly received statements from United on the matter, the company’s CEO, Oscar Munoz, issued an apology, saying, “I want you to know that we take full responsibility and we will work to make it right.”
The Department of Transportation has launched an inquiry into the incident, and New Jersey Gov. Chris Christie called for new rules to curb the airline practice of overbooking flights.
Delta Air Lines said it would change its policy about bumping passengers off flights. United also issued a new policy to ensure a situation in which a passenger is forcibly removed doesn’t happen again.
El-Erian said the airlines’ recent crisis is not going to impact them long term but has become a huge “reputational risk.”
“They should learn and other companies should learn from this,” he said.
— Reuters contributed to this report.