Physician who was dragged off flight settles with United

Dao's attorney did not reveal the amount of the settlement because the agreement came with a provision that the amount must be confidential.

Cellphone video of the confrontation aboard a jetliner sparked widespread public outrage over the treatment of Dao.

Prior to these policy shifts, United CEO Oscar Munoz sat down with NBC News' Lester Holt at the airline's Network Operations Center (NOC) in Chicago calling the incident a "system failure". United says that only 4 percent of its flights have more ticketed customers ready to board than available seats.

Shares of United Continental had slipped immediately following the Dao incident, but the company's quarterly earnings report slightly beat estimates later in the month.

The airline will also offer a new "no-questions asked" $1,500 reimbursement policy for permanently lost bags.

Delta Air Lines Inc. also increased payouts to nearly $10,000 for passengers who voluntarily give up their places on oversold flights following the public uproar over Dao's removal.

A United report released on Thursday suggested the airline needs to become more customer-friendly.

United said it would no longer call law enforcement to deny passengers boarding, nor would passengers who are already seated be required to give up their seats on overbooked flights.

The airline said earlier Thursday that from now on, no passenger would be forced to give up his seat except in cases of safety and security.

United and Dao announced on Thursday that they had settled their dispute out of court.

United Airlines also took out a full page advert in the Washington Post to apologise for the violent removal of the doctor, hoping to turn the page on its latest PR disaster.

In the immediate aftermath of the dragging incident - captured on video that was viewed by millions of people around the world - Delta announced that it too was increasing compensation for passengers who volunteer to give up their seats. United employees will be given new authority to find creative solutions to get bumped passengers to their final destinations - even if it means booking them on another airline or sending them to another airport.

Later, Munoz apologized and described the incident as "truly horrific".

Apparently, the flight got overbooked and UA staff wanted one passenger to get off the plane.

The three airport police officers who dragged Dao from the plane worked for the Chicago Department of Aviation.

Dao attorney Thomas Demetrio applauded United's move, calling the changes "passenger friendly".

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