Under the terms reached by the airline and Dao, the amount of the settlement will remain confidential, Dao's attorneys said.
His lawyers have said the 69-year-old Kentucky physician suffered a broken nose and a concussion and lost two front teeth during the April 9 incident, which was recorded on video that went viral worldwide. Video showed airport police at Chicago's O'Hare International Airport dragging a limp Dao off the crowded plane after he refused to give up his seat to make room for airline employees on the Louisville, Ky.-bound flight.
United issued a statement Thursday, calling the fiasco an "unfortunate incident," noting that the carrier has announced 10 policy changes it plans to adopt in response.
"We look forward to implementing the improvements we have announced, which will put our customers at the center of everything we do," the airline said.
United Chief Executive
The changes include limiting the use of law enforcement on planes, not forcing passengers who are already seated to give up their seats and offering up to $10,000 to passengers who give up their seats voluntarily.
In response to the Dao incident,
Delta Air Lines has given its gate supervisors permission to offer up to $10,000 to get passengers on overbooked flights to voluntarily give up a seat.
United said it would cut down on overbooking and would train front-line employees in their new ability to handle customer service problems on the spot. The carrier also is creating an automated system for soliciting volunteers to change travel plans before they take their seat.
“Dr. Dao has become the unintended champion for the adoption of changes which will certainly help improve the lives of literally millions of travelers,” Dao attorney
Demetrio also praised Munoz for the prompt settlement.
"Mr. Munoz said he was going to do the right thing, and he has," Demetrio said in the statement. "In addition, United has taken full responsibility for what happened on Flight 3411, without attempting to blame others."
Dao's attorneys and the airline both said they were satisfied with the agreement.
Demetrio said Dao does not plan to pursue a separate lawsuit against the city of Chicago or the officers employed by the Chicago Department of Aviation.
"No one else in the entire world is going to be sued by Dr. Dao," said the attorney, who has been involved in several high-profile personal-injury settlements. "United has stepped up to the plate and hit a home run."
Crisis management consultants and airline industry experts praised the quick settlement, saying the reputation of United and the entire industry would suffer further damage if the incident had been pursued in a lengthy civil lawsuit.
"It was a brilliant move by United," said Eric Rose, a crisis management consultant with Englander, Knabe & Allen. "They didn't want to die a death of a thousand cuts."
The video of the ugly scene received such widespread public condemnation that all airlines, not just United, are sure to put more focus on improving customer service, said Seth Kaplan, managing partner for the trade publication Airline Weekly.
"The good that can come of all this is that, I do think, passengers, in some small but meaningful ways, will be treated better than before — not just by United but by all airlines," he said.
But passenger advocates say they are skeptical that true changes will be adopted in the long run.
Paul Hudson, president of Flyersrights.org, a passenger rights group with 60,000 members, said that airlines don't always follow up on promises to treat passengers better following an ugly controversy that makes big headlines. He cited several examples of passengers being stranded for hours on delayed flights.
"Of course they are going to say all kinds of things now but what are they going to do when things cool off?" Hudson said.
Benedict Morelli, a New York civil litigation attorney who has handled several high-profile cases, said he suspects that the settlement amount was for less than $1 million because both Dao and United were motivated to quickly put the incident behind them.
He noted that news reports about the incident have exposed Dao's personal and criminal history. "I don't think it was the biggest settlement in the country," Morelli said.
Some controversy might remain, however: Following the incident, two of the Chicago aviation officers who forcibly removed Dao from the plane filed reports saying the passenger was "aggressive" when responding to requests to give up his seat and flailed his arms while fighting with officers. They blamed Dao for his injuries.
The reports, released Monday in response to
The four officers involved in the incident have been suspended by the Chicago Department of Aviation pending an investigation.
United and Munoz were seen as bungling the initial response to the controversy. And some travelers may be slow to forget.
Sue Kamm, a retired librarian from Los Angeles, said she stopped flying United years ago because of what she saw as poor service.
After the Dao incident, she said, "I wouldn't fly United if they gave me a free pass to fly first class to anywhere for the rest of my life."
4:20 p.m.: This article was updated with additional analysis and expert commentary.
1:20 p.m.: This article was updated with comment from United Airlines and information about reports filed by airport police officers.
12:30 p.m.: This article was updated throughout with additional context and comments.