Bethune, Gordon M. 1941–
Gordon M. Bethune
Chairman and chief executive officer, Continental Airlines
Born: 1941, in Austin, Texas.
Education: Abilene Christian University, BS; Harvard Business School, Advanced Management Program, 1992.
Family: Married; children: three.
Career: U.S. Navy, 1958–1978, aircraft maintenance officer; Braniff Airlines, 1979–1980, maintenance manager; 1980–1982, vice president, maintenance; Western Airlines, 1982–1984, vice president, engineering and maintenance; Piedmont Airlines, 1984–1988, senior vice president, operations; Boeing Commercial Airplane Group, 1988–1994, vice president and general manager, Renton Division; Continental Airlines, 1994, president and chief operating officer; 1994–1996, president and chief executive officer; 1996–, chairman and CEO.
Awards: Top 25 Global Managers, BusinessWeek, 1996; Laureate in Aviation Trophy, National Air and Space Museum, 1997; 25 Most Influential Executives, Business Travel News, 1998, 2000; 50 Best CEOs in America, Worth, 2001, 2002, 2003; Airline Person of the Year, Travel Agent, 2001.
Publications: From Worst to First: Behind the Scenes of Continental's Remarkable Comeback (with Scott Huler), 1999.
Address: Continental Airlines, Incorporated, 1600 Smith Street, Dept. HQSEO, Houston, Texas 77002; http://www.continental.com.
■ In more than a decade as the chairman of Continental Airlines, Gordon M. Bethune piloted the company from the brink of a third bankruptcy into the ranks of America's best airlines. He also managed to steer the carrier through the disastrous aviation industry slump that followed the terrorist attacks of September 11, 2001. In early 2004 Bethune announced plans to retire at the end of the year—a prospect that saddened both the airline's regular fliers and its stockholders.
Born in Austin, Texas, in 1941, Bethune grew up in Austin and San Antonio. At age 17 he dropped out of high school to join the navy, where he found his niche as an aircraft mechanic and aviation electronics specialist. While in the navy he completed his high school education and went on to earn a bachelor's degree from Abilene Christian University. He was eventually promoted to the rank of chief petty officer. After completing a 20-year hitch in the navy, Bethune hired on as a maintenance manager for Texas-based Braniff Airlines and rose through the ranks to become the carrier's vice president for maintenance. In 1982 Bethune moved to Western Airlines as vice president for engineering and maintenance after Braniff went out of business. Two years later he was hired by Piedmont Airlines as its senior vice president for operations.
In 1988 Bethune left Piedmont after it was purchased by U.S. Airways and took a job with the Boeing Commercial Airplane Group as vice president and general manager of its division in Renton, Virginia. When he received an offer to join Continental Airlines as president and chief operating officer in early 1994, he jumped at the chance—only to discover later that the airline was in far worse shape than he had believed. In From Worst to First, the book he co-wrote with Scott Huler in 1999, Bethune described the Continental he took over in 1994 in these words: "We weren't just the worst big airline. We lapped the field." By November 1994 Bethune was named Continental's CEO, to which was added the position of chairman in September 1996.
CONTINENTAL TURNS AROUND
What happened next confounded almost everyone in the airline industry. Continental, which had lost an average of $960 million a year from 1990 through 1993, trimmed its loss in 1994 to $619 million. By 1995 it was back into the black, posting a profit of $215 million. The airline's net income climbed further to $319 million in 1996, $383 million in 1997, and $385 million in 1998. In 1999 the airline posted a record profit of $455 million—a figure inflated, however, by a one-time $182 million gain from the sale of its interest in Amadeus Global Travel Distribution. Continental's net income in 2000 was $342 million. According to a report by Bill Hensel Jr. in the Houston Chronicle, Bethune built passenger confidence in the airline and sharply increased its traffic by refocusing its strategy on three basic concepts—"clean, safe, reliable" (December 28, 2003).
And then came 2001. The terrorist attacks on September 11, 2001, resulted in a dramatic drop in passenger flights for the remainder of that year. The impact of 9/11, which triggered a worldwide economic slump, continued to be felt over the next few years. The financial bloodletting would have been much worse if Bethune had not acted quickly to cut back sharply on operations and spending. Nevertheless, the airline posted losses of $95 million in 2001 and $413 million in 2002. By 2003, however, Bethune had once again guided Continental back to profitability.
One measure of the degree to which Bethune succeeded in remaking Continental into an airline respected for its reliability and quality of service were the many awards the airline won in the years after he took over as CEO. In 1996 and again in 2001, Air Transport World named Continental its airline of the year. In December 1999 Fortune referred to it as the "best airline in the U.S." SmartMoney rated Continental the best U.S. airline for business travel in 2000, while Investor's Business Daily named it the number two U.S. airline in 2001. In March 2002 Fortune rated Continental second in its separate rankings of the most admired U.S. and global airlines.
MANAGEMENT STYLE AND STRATEGY
Bethune offered some valuable insights in an interview with Texas Monthly into the strategy he used to turn Continental around. He observed that an important way to achieve success is to motivate others to aid success. Cooperation at all levels of an organization, Bethune contended, is essential to smooth operation and effective management. "And the only way you're going to get that [help] is to openly acknowledge and appreciate the contribution of others to the success of whatever it is you're doing." That means, he said, that a manager receiving an award must make clear that the accomplishment for which he's being honored was mostly the result of the hard work of others. "And they [the employees] sit up straight and feel real good, and the next day they work harder to help you be successful" (July 2000).
Of the five largest U.S. airlines, only Continental and Northwest managed to post a profit in 2003. Under Bethune's leadership, Continental reported a net income in 2003 of $87 million on revenue of nearly $8.9 billion. Although Northwest also showed a profit in 2003, AMR, which operates American Airlines; UAL (United); and Delta Airlines, the country's three largest carriers, all posted their third net loss in as many years. In the first quarter of 2004, Continental reported a jump of 11.1 percent in its revenue to a total of just over $2 billion; however, record high fuel prices pushed the carrier into the red. It reported a net loss for the quarter of $124 million. Losses were also posted by the other four airlines in the top five. Only UAL, which was emerging from reorganization under Chapter 11 of the Bankruptcy Code, reported a larger rise in revenue than Continental—17.2 percent—during the first quarter. AMR's revenue rose only 2.8 percent, while Northwest and Delta posted revenue increases of 8.1 and 3.1 percent, respectively.
See also entries on Boeing Company and Continental Airlines, Inc. in International Directory of Company Histories.
sources for further information
Akron Roundtable, "Gordon M. Bethune, Chairman and Chief Executive Officer, Continental Airlines, Inc.," June 8, 2004, http://www.akronroundtable.org/speakers/individuals/bethune.html.
"Bethune: My Last Year Running Continental," Pacific Business News (Honolulu), January 16, 2004.
Continental Airlines, Incorporated. "Gordon Bethune," June 13, 2004, http://www.continental.com/company/investor/bios.asp?SID=2187E471BC55425BBB4C03DFCC0A4B7A#01.
"Continental's Bethune to Step Down at Yearend," Air Transport World, February 1, 2004.
"Gordon M. Bethune, Chairman of the Board, Chief Executive Officer at Continental Airlines, Inc.," Forbes.com, June 8, 2004, http://www.forbes.com/finance/mktguideapps/personinfo/FromMktGuideIdPersonTearsheet.jhtml?passedMktGuideId=461726.
Hensel, Bill, Jr., "Continental CEO Won't Rest on His Laurels," Houston Chronicle, December 28, 2003.
Huey, John, "Outlaw Flyboy CEOs," Fortune, November 13, 2000, p. 237.
McConnico, Patricia Busa, "Gordon Bethune," Texas Monthly, July 2000, p. 54.
O'Reilly, Brian, "The Mechanic Who Fixed Continental," Fortune, December 20, 1999, p. 176.
Schmit, Julie, "New CEO Changes Airline's Approach," USA Today, November 7, 1994.