United Airlines will offer passengers up to $10,000 (£7,800) to give up seats on overbooked flights.
Chief executive Oscar Munoz branded the policy change - which comes as part of a review into the carrier’s practices - as a “turning point” for United, adding that the study “signals a culture shift toward becoming a better, more customer-focused airline”.
The changes follow an inquiry launched by United after a man was dragged from a fully-booked service earlier this month.
Dr David Dao lost two front teeth and suffered a broken nose when he was forcibly removed from the Chicago to Louisville flight by law enforcement officials in order to make room for United crew members.
The 69-year-old Vietnamese-American’s lawyer later said Dao found the experience "more horrifying and harrowing” than what he experienced when fleeing the Vietnam War.
The incident sparked widespread criticism of the airline after footage posted online was viewed by millions of people.
In addition to the $10,000 compensation deal, in a statement released today (April 27) United announced a series of new procedures as part of the report into the incident which include:
Munoz said: "Every customer deserves to be treated with the highest levels of service and the deepest sense of dignity and respect. Two weeks ago, we failed to meet that standard and we profoundly apologize. However, actions speak louder than words. Today, we are taking concrete, meaningful action to make things right and ensure nothing like this ever happens again."
"Our review shows that many things went wrong that day, but the headline is clear: our policies got in the way of our values and procedures interfered in doing what’s right.
“This is a turning point for all of us at United and it signals a culture shift toward becoming a better, more customer-focused airline. Our customers should be at the center of everything we do and these changes are just the beginning of how we will earn back their trust," he added.