Über die Autorin bzw. den Autor

Gordon Bethune is Chairman and CEO of Continental Airlines. Prior to joining Continental, he was vice president and general manager of customer service at Boeing. Bethune was also a senior operations executive at Braniff Airways, Western, and Piedmont Airlines.

Scott Huler is a professional journalist. He has been published in the New York Times, Washington Post, Los Angeles Times, and other leading North American newspapers and magazines.

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The numerous anecdotes alone are worth the price of the book . . . most readers will find themselves asking why everyone doesn't run a business as preached by the chief executive of Continental Airlines.-The Washington Post Book World

. . . in an age where managing seems increasingly complicated, some of Bethune's prescriptions are refreshingly straightforward.-Business Week

From Worst to First outlines Gordon Bethune's triumphs . . . about the turnaround he's led at Continental, a perennial basket case that's become an industry darling.-The Atlanta Journal-Constitution

From Worst to First is [Gordon Bethune's] story of Continental Airlines' turnaround under his command . . . The blueprint has worked . . . Fortune magazine named Continental the company that has 'raised its overall marks more than any other in the 1990s.'-The Seattle Post-Intelligencer

All of Gordon Bethune's proceeds from this book will be donated to the We Care Trust, a nonprofit organization that assists Continental Airlines' employees and their families in times of need.

Aus dem Klappentext

The numerous anecdotes alone are worth the price of the book . . . most readers will find themselves asking why everyone doesn't run a business as preached by the chief executive of Continental Airlines.-The Washington Post Book World

. . . in an age where managing seems increasingly complicated, some of Bethune's prescriptions are refreshingly straightforward.-Business Week

From Worst to First outlines Gordon Bethune's triumphs . . . about the turnaround he's led at Continental, a perennial basket case that's become an industry darling.-The Atlanta Journal-Constitution

From Worst to First is [Gordon Bethune's] story of Continental Airlines' turnaround under his command . . . The blueprint has worked . . . Fortune magazine named Continental the company that has 'raised its overall marks more than any other in the 1990s.'-The Seattle Post-Intelligencer

All of Gordon Bethune's proceeds from this book will be donated to the We Care Trust, a nonprofit organization that assists Continental Airlines' employees and their families in times of need.

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From Worst to First

John Wiley & Sons

CHAPTER ONE

Is This Any Way
to Run an Airline?

    Continental Airlines, in early 1994, was going nowhere, and itwas going nowhere fast.

    If you wanted to get anywhere else fast, like New York orDenver or Cleveland--or, in fact, if you wanted to get anywhereat all and get there on time--you were better off flying almost anyother airline.

    But nowhere? We were going nowhere like we had an appointment.And nowhere is where we could get you, though we probablywould have lost your luggage on the way.

    You think I'm exaggerating. I've got to tell you that I'm not.

    In February of 1994, I left my comfortable job as a big shot inoperations at the Boeing Company in Seattle. I moved to Houstonand took over as president and chief operating officer of Continental.The job looked great--president of the fifth-largestairline in the country. I knew Continental had operating problems,but then, I'm an operations guy, and solving problems is thechallenge any executive looks for.

    Within a few months, however, when United Airlines temptedme to leave Continental and take a similar position there, I lookedat that offer as a parachute and was prepared to take it. I wouldhave given anything to get out of Continental, which was, I hadno doubt, about to crash and burn. I felt as though I had beenhanded the controls of an airplane that people admitted was havinga little trouble. But nobody had told me both engines hadfailed. I could pull the yoke, push the rudders, and goose the throttleall I wanted--but, surprise! It turned out I didn't have all thecontrols, and the controls I had weren't connected to anything.Continental was headed for another financial and operational disaster.And all I could do was watch.

Portrait of a Crisis

Consider these statistics:

* In the years leading up to 1994, Continental was simply the worst among the nation's 10 biggest airlines, which are measured monthly according to several quality indicators by the U.S. Department of Transportation. For example, DOT measures those 10 largest airlines in on-time percentage (the percentage of flights that land within 15 minutes of their scheduled arrival). Continental was dead last.

* It measures the number of mishandled-baggage reports filed per 1,000 passengers. Continental was worst.

* It measures the number of complaints it receives per 100,000 passengers on each airline. Continental was last. And not just last--in 1994, Continental got almost three times as many complaints as the industry average and more than 30 percent more complaints than the ninth-best airline, the runner-up in lousy service. We had a real lock on last place in that category.

* It measures involuntarily denied boarding--passengers with tickets who show up at the gate but because of overbooking or other problems are not allowed to board the plane. That was our big success story: We were only among the worst there, not the worst.

We weren't just the worst big airline. We lapped the field.

    If your planes are showing up whenever they feel like it, if passengersare losing baggage, and if your service is annoying your customersso badly that they feel the need to tell the U.S. governmentabout it, it's going to show up in your financial situation, too.

    And let me tell you, it did.

    For one thing, Continental had gone into Chapter 11 bankruptcyprotection twice in the preceding decade. It had emergedreorganized twice, but somehow in all that time in bankruptcycourt it never found the secret to making a profit. Our stock hadundergone a steady decline throughout the company's times oftroubles, finally settling at around $3.25 a share, where it seemedunalterably stuck. In fact, in early 1995, during our darkest days offinancial crisis, we issued a press release describing our tenth consecutiveyear of losses. We did our best to bury the news that wewere in so much trouble that we weren't just trying to reorganizeour debts--we were simply going to have to stop paying some ofthem (temporarily, we hoped). We weren't in bankruptcy, but wewouldn't have had to change planes to get there.

    We watched the stock anxiously the next day--not a budge. Atfirst we thought we had done a good job of hiding or softening thenews, but then we figured it out. Our stockholders were just bettingwe'd survive. Our stock simply couldn't go any lower. It was atrock bottom.

    Just like company morale.

    In an organization that had suffered through 10 leaders in 10years (and as many different management schemes and new buzzwords),remaining employees had learned one survival strategy:Duck. No matter what management told employees they weresupposed to do, it was a pretty fair guess that it was a lie. And evenif direction was sincerely offered, chances were that long beforeanybody came around to check on whether employees were followingit, some crisis would have caused yet another managementchange. So employees just did what they could and kept theirheads down.

    Not that they did it happily. One of the strategies previousmanagement had used to keep the airline together was union busting,so our employees were paid far below industry average. Theirrepayment for their endurance and ability to hold on was regularlayoffs, wage reductions, and broken promises on wage snapbacksand profit sharing. Our on-the-job injury numbers were astronomical;so were turnover and sick time. Employee groups fought eachother for scarce resources and wages. When problems occurred,which of course they did almost constantly, covering your ass wasa lot more important than solving the problem.

    Continental's airport employees actually removed the Continentalinsignia from their uniforms to avoid having to answeruncomfortable questions from airport coworkers or from customerswhen off duty. When friends asked where they worked, they'dmumble, "Um, out at the airport."

    To put it bluntly, the Good Ship Lollipop we weren't.

    That's what I joined in 1994: a company with a lousy product,angry employees, low wages, a history of ineffective management,and, I soon learned, an incipient bankruptcy, our third, whichwould probably kill us.

    After I moved to Houston to go to work at Continental corporateheadquarters, I didn't sleep real well. But to be honest, sleepingwasn't going to solve this airline's problems.

    In fact, it looked like nothing might. I joined Continental inFebruary 1994. In June, when the United offer came, Continentaloffered me a pile of money to stay instead of jumping. And for reasonsI'll never quite understand, I stayed on. Some of it had to dowith the fact that I had lured several colleagues whom I deeplytrusted and respected to join me at Continental. I couldn't seeabandoning them. Some of it had to do with the challenge of tryingto save a company in such desperate straits. And some of it hadto do with the Continental employees, a disgruntled, angry, mistrustfulbut straightforward lot....