Inspector General Joseph Ferguson, who heads the midwestern United States city's watchdog office, had been pursuing an internal probe of the officers' actions.
The report did not name the officers, but said one escalated a non-threatening situation into a physically violent one, and said a second removed facts from one report. They were identified only as an aviation security officer and a sergeant.
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Two other officers, one who "made misleading statements in two reports" and another who "made material omissions in a report", were handed five-day suspensions.
Aviation Commissioner Ginger Evans announced earlier this year that Chicago's $19 million-a-year force of 292 unarmed aviation police officers would survive the passenger dragging fiasco, but only after their roles are minimized, their training is overhauled and the word "police" is stripped from their badges, uniforms and vehicles. After initially defending the flight crew's decision to have Dao forcefully removed, United CEO Oscar Munoz publicly apologized for the incident, and vowed the airline never again would have police remove a paid customer from a plane if passengers won't give up their seats voluntarily when United crew members need to get on a plane.
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The Aviation Department said a review of its policies and procedures was ongoing and would be completed by the first quarter of 2018, The Chicago Tribune reported. Dao lost two front teeth, broke his nose, and suffered a concussion as a result of being dragged off the plane.
Of the two officers who were fired, one was an aviation security sergeant and one was a security officer. Two officers were sacked, while the third officer resigned.
But viral video of the incident fast became an worldwide symbol of passenger discontent with the flying experience and a civic embarrassment that damaged Chicago's reputation as an global tourist destination.
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Demetrio said in a statement that Dao "is neither vindictive nor happy" about the inspector general's findings.