Passengers with smartphones are better than any new airline regulation, says ex-Virgin America chairman

Key Points
  • "We don't need any more regulation here" as a result of the United fiasco, veteran airline executive Don Carty argues.
  • "Any consumer business has to face the reality of today's technology," Carty says.
  • An attorney for dragged passenger Dr. David Dao says there "probably" will be a lawsuit.
We need to empower gate agents to deal with overbooking: Fmr. American Airlines CEO

The proliferation of photo- and video-capturing smartphones puts airlines under a whole new level of scrutiny and serves as a "great regulator" of business practices, longtime airline executive Don Carty told CNBC on Thursday.

Carty, a Hawaiian Airlines board member and former chairman of American Airlines and Virgin America, said he's OK with Congress looking into Sunday's forcible removal of a passenger from an overbooked United flight, but dead set against any new regulations from Washington.

"We don't need any more regulation here. The airlines will certainly make sure these kinds of situations never happen again," he aruged on "Squawk on the Street."

Passengers with smartphones also serve as a "great regulator" of consumer-orientated businesses, such as airlines, Carty said.

"Any consumer business has to face the reality of today's technology. We are going to be very highly visible. Our service is going to be very highly visible. How we treat our customers is going to be highly visible," he explained.

Carty said the United fiasco has revealed the need to give gate agents more latitude in sweetening the monetary or service-orientated incentives to get people to voluntarily give up their seats.

"I guarantee you there was a price for United the other night that would have been less than what they're going to pay in this deal," he said.

Before the airport police were called in and Dr. David Dao was dragged off Sunday's United Express Flight 3411 from Chicago to Louisville, Kentucky, the airline said it was offering as much as $1,000 in compensation to get any passengers to agree to be bumped.

When there were no takers, United chose four passengers, including Dao, to reschedule to another flight to make room for four airline crew member who needed to be shuttled to work from Louisville the following day.

Three of the passengers left without incident. But Dao refused to get off the plane, saying he's a doctor who needed to see patients back home.

Videos taken by other passengers of Dao struggling with officers to stay on the plane and his bloody injuries went viral on social media.

An attorney for Dao led a news conference Thursday morning and said there will "probably" be a lawsuit. Dao's lawyers filed an emergency "bill of discovery," seeking the airline's documentation of Sunday's confrontation, including all surveillance videos, cockpit voice recordings, passenger and crew lists, and incident reports.

United CEO Oscar Munoz's first attempt to apologize on Monday for "having to re-accommodate these customers" was highly criticized.

Munoz on Tuesday issued the kind of apology crisis management experts said he should have gone with in the first place, expressing outrage and regret, and promising a "thorough review."

United said late Wednesday that all passengers on Sunday's flight are getting reimbursement equal to the cost of their tickets, which can be taken in cash, travel credits, or miles.