United settles with passenger dragged off flight

Key Points
  • United has settled with Dr. David Dao for an undisclosed amount.
  • The airline operator announced earlier Thursday a number of new policies that it hopes will prevent future incidents.
  • Earlier this month, video circulated of Dao being forcibly dragged from his seat.
Dragged passenger reaches settlement with United

United Airlines has settled with Dr. David Dao after he was dragged off a flight earlier this month.

As part of the deal, the settlement amount remains confidential.

Earlier Thursday, United unveiled a slew of policy changes that it hopes will prevent a repeat of the public relations disaster that has engulfed the company after Dao was forcibly removed from a plane on April 9.

Dao was a passenger on Flight 3411 from Chicago to Louisville, which was overbooked. He and other passengers were offered $800 to give up their seats for United crew members.

The airline said it will now offer up to $10,000 to customers who volunteer to give up their seats on an overbooked flight.

Social media erupted in fury after videos and photos of the incident circulated. CEO Oscar Munoz drew fire when he used the euphemism "re-accommodate" in a public statement to describe what happened to Dao.

Munoz did not improve the situation when he said Dao was "disruptive and belligerent" in an email to employees. He has since changed his tune and repeatedly apologized for how the airline handled the situation.

United should be applauded "for this acceptance of corporate accountability," said Thomas Demetrio, one of Dao's lawyers.

Attorney of removed United passenger releases statement on behalf of family

"Dr. Dao has become the unintended champion for the adoption of changes which will certainly help improve the lives of literally millions of travelers," Demetrio said. "I sincerely hope that all other airlines make similar changes and follow United's lead in helping to improve the passenger flying experience with an emphasis on empathy, patience, respect and dignity."

The settlement also releases Republic Airways and the City of Chicago from any responsibility, according to Reuters. The incident occurred on a United Express flight operated by Republic Airways.

United said in a statement that it is pleased to have reached an "amicable resolution."

"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.

Shares of United pared losses, nearing session highs after the news.

This story is developing. Please check back for further updates.

— Reporting by CNBC's Phil LeBeau. Written by Christine Wang. Reuters contributed to this report.

Watch: United 'pleased' it could reach an amicable resolution

United: 'Pleased' we reached an amicable resolution