The best way for airlines to avoid a situation like the one that led to an unwilling passenger being forcibly removed from a United flight is to give their employees the power to keep increasing the monetary incentive to get people to voluntarily give up their seats, David Neeleman, founder and former CEO of JetBlue, told CNBC on Tuesday.
"If you have a situation where you have people on an airplane and you have to pull someone off, there's a price" to get volunteers, Neeleman said on "Squawk on the Street." "It's about giving control ... [to] the gate agent to be able to bid a higher price to be able to get people to voluntarily to leave the airplane. It's as simple as that."
On Sunday evening, a video surfaced on social media showing a man, who two aviation sources confirm to NBC News is Dr. David Dao of Kentucky, being dragged off a United plane at Chicago's O'Hare International Airport because the flight to Louisville was overbooked. Nobody volunteered, so Dao and several passengers were chosen at random to get bumped. He refused to get off the plane.
Subsequent videos showed the passenger, believed to be Dao, bloodied from the confrontation on the United Express flight operated by Republic Airways.
United was not the only airline having major problems this week, Neeleman said. "At the same time, Delta has canceled 3,000 flights and people are stranded in Atlanta. It's amazing, but blood, I guess, brings a lot of attention." United shares fell as much as 4 percent in early Tuesday trading before regaining some ground to a drop of 2.5 percent in afternoon trading.
Neeleman, who was CEO of JetBlue from 1998 to 2007, talked about how he dealt with the fallout from the 2007 Valentine's Day ice storm that caused massive delays, cancellations and stranded passengers inside planes for nearly 11 hours.
"We created a customer bill of rights," Neeleman said. "We made commitments to our customers. Within two weeks, our sentiment was actually higher than it was before. It's how you react to these crises that really makes the difference."
Monday evening, United CEO Oscar Munoz doubled down in a companywide email, claiming employees "followed established procedures" when removing the passenger because the flight was overbooked, and calling the passenger "disruptive and belligerent."
United will learn from the crisis, said Neeleman. "This won't happen again at United."
Neeleman was being interviewed on CNBC Tuesday shortly after his latest venture, Brazil's third-largest airline Azul, started trading on the New York Stock Exchange.
The stock debuted up as much as 8 percent.
Azul, which raised $645 million in a dual IPO in Sao Paulo and New York, was started in 2008 by Neeleman who is chairman and CEO.