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United Airlines has U-turned on its plan to promote CEO Oscar Munoz to chairman following his response to a passenger being dragged bloodied and screaming from one of its flights.

The airline called police officers to drag 69-year-old Dr David Dao from his seat to make room for airline staff after the flight was over-booked.

Dr Dao, from Kentucky, required hospital treatment and later said he had injured "everything".

The company's initial response was to blame Dr Dao, saying he had been "disruptive and belligerent" before a statement from Mr Munoz finally admitted the incident had been a "truly horrific event" and offered him a direct apology.

Mr Munoz later confirmed the company would no longer use police officers to remove passengers and said a review of how it handled oversold flights would be made available at the end of April.

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The incident earlier this month was filmed by passengers, went viral on the internet, and the backlash against the company's initial response sent its share prices tumbling.

The airline said Mr Munoz proposed that his employment contract be re-written to remove the expectation that he would become chairman at next year's annual meeting of parent United Continental Holdings Inc.

United's board of directors had supported Mr Munoz, according to a statement last week from Chairman Robert Milton.

But United said on Friday in a securities filing that management and the board "take recent events extremely seriously" and will link executive bonuses partly to "improving the customer experience".

The company hit the headlines for all the wrong reasons in March when it was after barring two teenage girls from boarding a flight because they were wearing leggings.

Mr Munoz was named CEO in September 2015 and has focused on improving United's poor relations with workers' unions.

Robert Milton, who has been chairman since 2016, will retain that position, the company said.