United Airlines to offer passengers up to $10,000 to surrender seats after dragging incident

United Airlines said on Thursday it would offer passengers who volunteer to forfeit their seats on overbooked flights up to $10,000 as part of the carrier’s efforts to repair the damage from the rough removal of a passenger.

The offer came after rival Delta outlined plans to offer up to $9,950 in such cases.

United also said it would take actions to reduce overbooking flights and improve customer satisfaction.

"Our goal is to reduce incidents of involuntary denial of boarding to as close to zero as possible and become a more customer-focused airline," the carrier said in the statement.

United had spent the last two weeks embroiled in controversy after videos recorded by fellow passengers, which went viral, showed David Dao, 69, yanked from his seat aboard a Louisville, Kentucky-bound United flight before takeoff from Chicago’s O’Hare International Airport to make room for crew members.

Mr Dao lost two front teeth in the scuffle, incurred a concussion and broke his nose, according to his lawyer, and will likely sue the airline.

United typically oversells flights by less than zero to 3 per cent of the plane’s seat capacity to account for no-shows.

United said it would no longer call law enforcement to deny passengers boarding, nor would passengers who are already seated be required to give up their seats on overbooked flights.

United will adopt a "no questions asked" policy on permanently lost baggage, paying customers $1,500 for the value of the bag and its contents, beginning in June.

"This is a turning point for all of us at United," chief executive Oscar Munoz said in a statement.

Mr Munoz, who took the helm at United in 2015 as part of an effort to improve customer relations, has faced calls to step down after referring to Mr Dao as "disruptive and belligerent" in a statement following the incident.

It sparked a national conversation on US carriers’ treatment of customers in an industry comprising just a handful of competitors following years of mergers and consolidations.

United announced last week that Mr Munoz, in a move he himself initiated, would not become company chairman in 2018 as stated in his employment agreement.

United Airlines’ 10 policy changes in full:

• Limit use of law enforcement to safety and security issues only.

• Not require customers seated on the plane to give up their seat involuntarily unless safety or security is at risk.

• Increase customer compensation incentives for voluntary denied boarding up to $10,000.

• Establish a customer solutions team to provide agents with creative solutions such as using nearby airports, other airlines or ground transportations to get customers to their final destination.

• Ensure crews are booked onto a flight at least 60 minutes prior to departure.

• Provide employees with additional annual training.

• Create an automated system for soliciting volunteers to change travel plans.

• Reduce the amount of overbooking.

• Empower employees to resolve customer service issues in the moment.

• Eliminate the red tape on permanently lost bags by adopting a "no questions asked" policy on lost luggage.