"It was a mistake of epic proportions, clearly, in hindsight," Munoz told a congressional hearing. He said passenger David Dao was treated in a way that no customer or individual should be treated, calling it a "terrible experience" that should never be repeated.
United has taken a series of steps to reduce overbooking of flights since the April 9 incident and will raise to USD 10,000 the limit on payments to customers who give up seats on oversold flights, Munoz said. The airline also said it will improve employee training.
The hearing by the House Transportation Committee comes amid worldwide outrage sparked when Dao was dragged off a United flight after refusing to give up his seat to a crew member.
The incident ignited a debate about poor service and a lack of customer-friendly policies on US airlines.
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Transportation Committee Chairman Bill Shuster, R-Pa., said the hearing gives lawmakers "an opportunity to get much- needed answers about airline customer service policies and what is being done to improve service for the flying public."
United President Scott Kirby joined Munoz at the hearing, along with top executives of American Airlines, Alaska Airlines and Southwest Airlines.
Dao's attorney has praised the airline and Munoz for accepting responsibility and not blaming others, including the city of Chicago, whose airport security officers yanked Dao from his seat and dragged him off the United Express plane.
Dao was waiting to fly to Louisville, Kentucky, on April 9 when the airline decided it needed four seats for Republic Airline crew members who needed to travel to work on another United Express flight in Louisville the next morning.
Video of the incident has sparked more than two weeks of withering criticism and mockery of United. Munoz initially blamed Dao, but later said he was horrified by the event and called it a failure on United's part.
United has vowed to reduce - but not eliminate - overbooking, which occurs when more tickets are sold than there are seats on the plane.