'United Breaks Guitars': Did It Really Cost The Airline $180 Million?

By now nearly 4 million people have watched the 'United Breaks Guitars' video that has made its way around the web and back. A quick catch-up: United Airlines passenger Dave Carroll had his Taylor guitar destroyed by the airline's baggage handlers during a flight last year. After United repeatedly declined to reimburse him for the damage, he wrote a now-famous song decrying their customer service and their brand. It was funny, justified and smart.

The damage to United's brand was undeniable. But perhaps the craziest claim to come surface during the the entire United Breaks Guitars episode comes from Chris Ayres of The Times Online in the U.K. In a column earlier this week, Ayres claimed the Carroll mishap actually cost United $180 million, or 10 percent of its market cap:

"..within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines' stock price to suffer a mid-flight stall, and it plunged by 10 per cent, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars."

While there were certainly 'thunderclouds of bad PR' - metaphorically speaking, of course -- the Times makes a pretty unforgivable leap of logic here. It's more than a bit bold to say that the Carroll incident caused the United stock price drop.

Though you can certainly imagine a handful of enterprising traders moving shares of United on the news that it was fending off a new media attack - YouTube arbitrage? - it's borderline silly to suggest that a something like a cheeky web video could move such a prominent stock 10 percent. United is an enormous, struggling company, with a stock price that has been on a downward trend since last fall. In other words, it's a typical airline stock.

What do you think? Is there any way Carroll's song could have cost United $180 million? What kind of damage did it do to United's brand? How do you value bad PR like this?

WATCH the original United Breaks Guitar clip here:

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Comments

[scotwitt]

Tom Paxton (a formerly Chicago-based singer-songwriter) wrote a great tune in the 1980s" Thank You Republic Airlines for Breaking The Neck of My Guitar."

This isn't anything new- baggage handling in the U.S. has sucked for years- why can't a touring musician check his/her instrument(s) with the assurance of getting them whole at the end ot eh trip...or the airline paying to replace it? That's the real issue.

Some musician guides advise them to purchase a ticket for their instrument. These folks are barely making it as it is.

[Sidehacker]

Glad United gave Dave a creative outlet, hated Dave had to go through all the heartache and disapointment to get where he's at. If United truely thought that Dave's music video was the cause for the drop their stock, Dave would be on the receiving end of a lawsuit. A number of years ago a very prominant TV personality made a comment about beef, beef prices fell. Lawyers representing the cattle industry filed a lawsuit against Oprah. Now Oprah was aquitted but she has the funds to hire the best lawyers.

[BassguyGG]

Bet United wishes they replaced the guitar now! A prime example of how these corporations can be penny-wise and pound foolish.

[SeconLine]

Nice to see that someone managed to cost United so dearly.

Maybe they'll think next time about the people who really matter...

The customers!

[Songbird53]

Did they replace the guitar?

[CommonSenseMom]

Great idea!!!! So glad it worked. Power to the people!

Got any songs about the "Party of NO"? I'm thinking they could use the "United treatment"­.....bigti­me.

[RadicalRepublican]

Carroll's song didn't do anything to United Airlines. United did it to themselves by mistreating a customer. He merely shined a light on the truth.

[Imzadi]

Revenge is a dish best served cold. Dave accomplished that in spades (and most entertainingly).

Good for him. A former road warrior living at a major Northwest (now Delta) hub, I would fly United to Chicago frequently. None of them are any good.

[tweedledeedumb]

People may laugh but I am a violin repair person in NY and I see tons for broken instruments from the airlines. It is my single largest source of major cello repairs. The airlines could fix this if they were held libel as any other negligent company would be. Good for Mr. Carrol for speaking out. The insurance companies that end up paying for this negligence should sue.

[TruEngineHearing]

United broke my heart years ago. When I was a child my family flew a lot, and I got a number of pairs of wings from the pilots, and I forever - or so I thought, would feel that strong loyalty to that airline, and those pilots. When, a few years ago, United stepped off the cliff and screwed these pilots out of their pensions, I felt as if I had been slugged. Here were the giants, the heros of the skies, each of them thrown out like a bad burger flipper. Now, as United is insulted and blamed, I stand there, stunned that I can't bring myself to even care whether they ever fly again.

[Chazmania]

This story is a perfect example of what the corporate culture is all about these days. screw people and make no apologies. too big to fail bailouts and dishonest tactics. the worshiping monetary gain over human consideration. and on and on. Maybe if more people found ways to expose these corporate criminals things may change. i commend this guy and his band for sticking it to the airline for its abuse. I hope it did cost them millions and also sends a clear message to the rest of them.

[Tommygun264]

United doesn't treat passengers much better. When I came back home from my first (and possibly last) trip to Europe, we sat on the plane with no a/c for two hours in Chicago, then when the flight took off, the a/c was stuck on high from Chicago to San Francisco. We missed our connecting flight to Honolulu and were trucked out to a motel for three hours sleep before they took us back to the airport for the morning flight to Honolulu. I ended up with a case of pneumonia due to the a/c incident and exhaustion. But hey, I got $10 for breakfast and a coupon for $50 off my next flight with United (which is never going to happen).

[PopeRatzo]

I stopped flying United the same time. I come from a family of working-class union people and my parents, who had just retired and liked to travel, decided they'd never fly United again. I followed suit.

Now that I learn that United hurts guitars, I'll certainly never try them again. I like guitars.

[Clayton139]

Great song Dave Carroll for Transparency and the Truth of your Misfortune of your way to live and way of life and no regards by United to rectify your damaged Guitar and all the other people they have hurt in the past !

Dave Carroll should write a song about the Truth of the (Health Insurance industry and our Corrupt Government) ! Just like the lives of all the Families that are Bankrupt by the Health Insurance Industry for No Value for human life ! They just want to Profit off of us !

Dave Carroll should Write for the American people about the TRUTH about the Health Insurance Companies Interest, the Lobbyist, paying Congress in Campaign Contributions, pay off's and all other ways they have ruined Families Lives’ by putting our (Health up for Sale) !
Especially the GOP-Republicans and the Blue Dog Democrats!

(We need Transparency and Truth for the Moral values for Real Health Care Reform)!

[Dave-O]

When companies choose to not deliver good customer service they risk getting this kind of negative publicity. When you deliver shi**y service, you get what you deserve. In this culture of cover your butt and lack of personal responsibility, you get what you deserve. Don't screw with your Karma! What goes around, comes around.

[LeftRight]

I remember the good old days when companies understood that for every time of GREAT service, you may have two to three people informed about it, and that for every time of HORRIBLE service you had 10 to 20 people informed about it. Back then they had the goal of getting MORE people informed of the good service by ensuring that the good service was all that was out there!!!

Back when I was in high school I worked for a Grocery Store where they actually had as the rule "The customer is ALWAYS right!!" and LIVED by that rule!!! We had a guy inform a customer that he had paid with a smaller bill than had been given to him, and when that customer complained, he was placed on temporary suspension (with pay) until they could confirm or deny. Once they confirmed that the customer was correct, they let him go!!

[revruc1]

All this for a guitar? It seems like you wake up sometimes in the wrong world.

[veghead1234]

Taylors are NOT cheap. His guitar was probably a minimum of $1,000, but more likely around $3,000 if he got it new. Plus, if you don't know musicians you may not realize, but we get pretty attached to our instruments (and we get out our frustrations by writing songs about them). Perhaps United should just buy the next guy a new guitar! This hasn't been a good advertisement for them, and I will certainly advise my musician friends NOT to go United if they are bringing their guitar.

[GetoffMylawn]

I just bought my forth Taylor, a T3/B tobacco sunburst, I would hate to get even a scratch on it unless it was a result of a might strum.
I love my Taylors, United... not so much.

[JoeSchmuk]

It's also not just about guitars. It's about mega companies (united this time) mistreating their customiers and getting away with it because they are just too megalithic to deal with. After all, it's not just guitars that are getting mistreated, although i always carry my guitar on board, and manage its state until i disembark.

[LeftRight]

All this for $3,500 in cash that United Employees stole from the man?? It seems like you wake up sometimes in the wrong world.

See what I did there?? That's the price for a new Taylor guitar, and for the United employee to break it is the same as for that same employee to steal the money from the customer!!

[ominous]

That guitar is his living.

[TrueBlueMajority]

hey, that was pretty good.

i heard about this but had never seen the video before today.

perhaps other corporations will reconsider their poor customer service policies knowing that any dissatisfied customer could make a video and trash them on YouTube.

Taylors are expensive and the good ones cost thousands of dollars. But it cost United a WHOLE lot more than that in bad press and maybe it did make the stock go down also.

Dave Carroll is a serious musician who can play and sing and write good songs. And he was probably emotionally attached to his guitar also--most guitar players are. So he deserves all the positive publicity he's getting from this, and the stupid shortsighted beancounters at United deserve all the negative publicity they are getting.

[attitude4life]

I'm an active investor myself. There's a fine line between pleasing the shareholders and pleasing the customers. The problem is sometime as investors we want the golden egg too quick at the expense of customer service. Reduce maintenance get mecanical problems, reduce customer service get utube problems. One is just as bad as the other. That's technology.