Continental Airlines' colourful chief executive Gordon Bethu

[Blastor]

Continental Airlines' colourful chief executive Gordon Bethune retiring

Kristen Hays
Canadian Press

HOUSTON (AP) - Love him or hate him, Continental Airlines CEO Gordon Bethune makes an indelible impression.

He's blunt. He's jovial, with a sarcastic wit. He has no patience for euphemisms. And this week the man credited with resuscitating Continental from near death a decade ago will hang up his wings.

"I don't know what I'll be doing, but I won't be dead," Bethune joked recently about his retirement.

Bethune, 63, had originally planned to retire in August 2006, when he turns 65. But last January he announced that at year-end he would leave the airline in the hands of his longtime second-in-command, Larry Kellner, in tandem with Texas Pacific Group president David Bonderman's departure earlier this year from Continental's board.

Texas Pacific once held a controlling interest in Houston-based Continental and helped the No. 5 carrier emerge from its second bankruptcy in 1993. But the group's controlling interest in America West and reported interest in buying stakes in other rivals drew conflict-of-interest fire from Continental's labour unions.

"There is a time to go and this is as good as any, but not with that pimple in our shoe," he said. "And so it was brokered in, I think, a civilized way ... Larry's got a good board. There's no cloud, there's no suspicion."

Throughout his career, Bethune has spoken for the industry, but Continental comes first. He'll pounce if he perceives a competitor has an unfair advantage, whether or not he gets a few bruises.

"It is certainly true that because he is so outspoken, there probably aren't a lot of warm feelings for him in executive offices of many other airlines," said Daniel Kasper, who runs the transportation practice for the consulting firm LECG in Cambridge, Mass.

"His job is not to win a popularity contest among his competitors. If he's trying to win popularity contest, it's with customers and maybe with Wall Street. And with the labor force too."

Kellner, whose video welcoming Continental passengers will replace Bethune's on Continental flights when he assumes the CEO chair Jan. 1, said the carrier's strategy or culture won't change. He said Continental will maintain open communication with employees and stick to its mantra to provide "clean, safe, reliable" service.

"By the same token, I'm not Gordon," Kellner said. "He's clearly very colourful. People will see some differences there. But we're obviously both very competitive and we're also pretty direct."

InsideFlyer magazine editor Randy Petersen said Kellner will ease into the top role, having been Bethune's No. 2 executive for nearly 10 years. Kellner's successor as No. 2 - executive vice-president Jeff Smisek - matches Kellner's longevity at the carrier.

"He's learned some things along the way," Petersen said, calling Kellner a "pretty bright guy."

"He's not a Gordon Bethune, and that's probably the biggest obstacle he'll have."

Susan Donofrio, an airline analyst for Fulcrum Global Partners, said Kellner can carry on Bethune's legacy in a similar fashion as Southwest Airlines chairman and founder Herb Kelleher's CEO successors did for the low-cost airline.

"It's not in a shambles or anything," Donofrio said. "They continue to be one of the leanest operators" among the major carriers.

Continental was the opposite before Bethune arrived.

The carrier went bankrupt in 1983 and again in 1990. The airline was mired in labour strife and a last resort for dissatisfied customers.

Bethune fixed planes for the U.S. navy as a teenager and later worked for three other airlines and Boeing Co. before joining Continental as a top executive in February 1994. Seven months later, he became the carrier's 10th CEO in a decade.

"I always keep my tools because you never know about this job," Bethune said.

Bethune then led Continental's transformation from a weak also-ran into a dependable carrier with positive labour relations.

Jay Panarello, chairman of the master executive council of Continental's pilots' union, credits Bethune with turning around Continental's shabby reputation. But he noted that Kellner and others - including former Continental president Greg Brenneman, now CEO of Burger King - also deserve kudos.

"He's P.T. Barnum," Panarello said of Bethune. "He's a salesman. He's flamboyant and everything else, but unfortunately some people who were very complementary to what he did were lost in his limelight."

Before the Sept. 11, 2001 attacks, Continental was the sole major U.S. carrier that was profitable. More than three years later, the industry continues to struggle with more than $5 billion in losses so far this year as high jet fuel prices overshadow increased air travel.

Continental lost $157 million in the first nine months of 2004 despite an 11 per cent hike in revenues. The airline had trimmed $1.1 billion in costs since the attacks, but this month became the last of its peers to seek employee wage and benefit cuts - a target of $500 million by late February - in hopes of profits next year.

Kellner and Smisek agreed to cut their salaries by 25 per cent and 20 per cent, respectively, and forgo any earned 2004 bonuses as part of the cuts. The salary cuts totalled nearly $400,000, according to a regulatory filing.

© The Canadian Press 2005

[Panama Jack]

It will be interesting to see what Gord Bethune will be doing after his retirement. His book From Worst to First is an excellent read, and I think he deserves full credit for saving what was then basket-case Continental Airlines. Some of the Continental employees I have met have mixed reactions about him, but one thing is for sure, he definately is a people person.

Perhaps we can lure him into Canada?