Dao is receiving treatment in a Chicago hospital for his injuries, according to a statement from lawyers who said they represent him.
Demetrio, who indicated Dao is going to sue, said the industry has long "bullied" passengers by overbooking flights and then bumping people, and "it took something like this to get a conversation going".
United Airlines spokeswoman Megan McCarthy said the passengers can take the compensation in cash, travel credits or miles.
The PR disaster seen around the world has led to widespread criticism of United Airlines, as well as almost $1bn getting wiped off the holding company's value after stock plummeted.
Further, Munoz said United will not use law enforcement to remove on-board passengers in the future, as was the case on Sunday evening.
Dao was on a full jet at O'Hare Airport that was scheduled to fly to Louisville, Kentucky, on Sunday night when he and three other passengers were ordered off to make room for some employees of a partner airline.
In a series of three statements and an interview, United CEO Oscar Munoz became increasingly contrite. He said that plane seats are perishable commodities - once the door has been closed, seats on a flight can't be sold and lose all value.
USA airlines are bumping passengers off flights at the lowest rate since 1995, a Reuters analysis of federal data showed on Tuesday, even as United Continental Holdings (UAL) has kicked up a storm over the practice. One of the officers involved has since been put on leave, and the department has launched an investigation.
"Probably the word is shame comes to mind", Munoz said after days of criticism and ridicule of the company on social media.
The CEO of United Airlines' parent company is pledging to review policies after a passenger was dragged off a full fight in Chicago.
His daughter says the family was "horrified, shocked and sickened" to learn and see what happened.
The United Airlines passenger who was videotaped being bloodied and dragged off an overbooked plane by airport police signaled Wednesday he would fight back in court.
At a City Council committee hearing Thursday, aldermen ripped officials from United and the department about the episode. Finally, after Dao returned to his seat, four security guards ripped him from his seat and dragged him, unconscious, by his arms, off the plane.
But when asked by ABC whether the passenger was at fault in any way, Munoz replied, "No, he can't be".
United was trying to find seats for four employees, meaning it wanted four passengers to leave the plane.
New video footage has found its way on the Internet showing the moments that lead up to the attraction that occurred on United Airlines flight 3411 on Sunday.
But Dao agreed to get off the plane, passenger Jayse Anspach said.
When Dao repeatedly refused to leave his seat, employees called in security personnel from the city's Aviation Department, who dragged him off the aircraft.
It's an often-overlooked policy to which you agree when you book your tickets.
Dr. David Dao was forcibly removed from a full flight after refusing to relinquish his seat. A day earlier, the top four members of the Senate Commerce Committee asked Munoz and Chicago airport officials for an explanation.