Continental Airlines: Business Turnaround Legend

Updated on June 17, 2020
aerospacefan profile image

John writes about topics related to business, organizational behavior and consumer science. He holds a MBA from Indiana Tech.

Continental Airlines Aircraft
Continental Airlines Aircraft

Continental Airlines

The ability to inspire and motivate others to reach important key goals is vital to organizational success. Business theorists Kouzes & Posner suggest that to enlist people in a vision, leaders must know their constituents and speak their language.

This article will examine the organizational impact of inspiring and motivating others in the context of the five practices of exemplary leadership as offered by James Kouzes and Barry Posner’s book, The Leadership Challenge.

Gordon Bethune, the former chairman and chief executive officer of Continental Airlines (Continental) from 1994-2004 is presented as an example. A brief history of Continental is provided for background purposes.

An exploration of how Bethune inspired employees is presented with specific focus on how he changed the atmosphere from negative to positive, how he touched hearts and minds, how he demonstrated empathy, and how he influenced the organization’s culture.

Continental and United Aircraft at Gates
Continental and United Aircraft at Gates | Source

Brief History of Continental Airlines

Continental Airlines was a major U.S. Airline in the United States that operated domestic and international passenger flight service. Founded in 1934, the company was headquartered in Houston, Texas. In 2010, Continental merged with United Airlines, creating one of the largest airlines in the world.

This merger, however, may very well not have happened had it not been for the steady leadership of the company’s former chief executive officer, Gordon Bethune, who took the company from near financial collapse in 1994 and helped transform the organization into a profitable, powerful and admired global airline.

It is important to note that the decade proceeding Bethune’s leadership, Continental was essentially managed and run by Frank Lorenzo; an individual who many believe caused great harm to the carrier. Lorenzo was largely hated by most all employee groups, particularly the pilots.

Losing Money
Losing Money

An Airline About to Close

In the early 1990s, Continental Airlines was a failing organization. It has filed for bankruptcy twice in its past, once in 1983 and then again in 1990. Employees were angry, unmotivated and highly distrustful of company management. During the previous decade, workers had seen their pay slashed, benefits taken away, and jobs cuts.

The previous chief executive, Frank Lorenzo (former head of Eastern Airlines), was so hated by employees that he had personal body guards around him at all.

After Lorenzo exited the airline, the company board of directors began a search for a new chief executive, hoping to salvage a company that was quickly losing altitude. After an exhaustive search, the board of directors named Bethune Continental’s new chief executive in 1994.

At the time of he took the reins of the company, the airline had only enough money to stay in operations for a few months and its stock was nearly worthless. In short, Continental at that moment in time was unprofitable and quickly dying. Moving swiftly to rescue the company, Bethune enacted a series of changes at Continental that breathed new life into the organization, which had the immediate impact of increasing employee morale and strengthening the company’s liquidity.

Gordon Bethune
Gordon Bethune | Source
Continental HQ
Continental HQ | Source

Inspiriting Employees

One of the first things that Bethune recognized needed change at Continental was employee morale. This would be no easy task as many workers at the airline felt completely detached from the organization, which was due in large part to the previous management team.

Lorenzo, the former chief executive, was cut off from employees and did not communicate. The executive offices had guards posted at the doors with emergency “buzzers” that could be activated when disgruntled employees came to air concerns.

Bethune immediately created change by establishing an open door policy and encouraging employees to visit the corporate offices and talk about concerns with management.

Additionally, Bethune held weekly “Town Meetings” at different cities throughout the company’s global network and established an employee information hotline to recap highlights of each meeting. These important steps helped Bethune to gain the trust of employees, and by extension, care about their work.

Go Forward Plan

  • Create smart route structures people want to fly
  • Invest in the airline for the future (aka new planes)
  • Make travel reliable so that customers trust company
  • Treat one another with respect

Changing the Work Atmosphere From Negative to Positive

As stated previously, employee morale at Continental prior to Bethune’s leadership was dismal with a work atmosphere that could be characterized as negative. Transforming the atmosphere to something positive and productive initially proved difficult however, over the course of time, employees began to trust Bethune and his management team.

A significant factor in this transformation had a lot to do with a corporate plan Bethune enacted called the Go Forward Plan (GFP). The program itself was concerned with several key elements. These key elements included:

  1. Fly to win.
  2. Fund the future.
  3. Make reliability a reality.
  4. Treat one another with respect.

Each point in the GFP contained very basic information that workers intrinsically understood. In addition, GFP contained incentives for reaching important milestones, such as having near perfect on time performance.

Within one year of enactment of the GFP, Continental began making a substantial turn around and realized huge gains in revenues and customer satisfaction GFP, under Bethune’s leadership, also saw a massive shift in employee attitudes about the company, changing it from a negative working atmosphere to something very positive. For the first time in many years, employees were proud to work at Continental and cared about the product they produced.

Touching Hearts and Minds

Bethune’s leadership at Continental was transformative in nature. One of the major ways in which he was able to turn the company around, going from what he described as “Worst to First” was to establish personal relationships with employees. He did this by doing the following:

  1. Personally reaching out to employees and calling them at home to congratulate them on a job well done.
  2. Publicly celebrating important company victories, such as surpassing an on-time performance goal.
  3. Doing the work of frontline employees when possible, meaning working at the ticket counter, working on the ramp and flying the plane. Bethune was a certified Boeing 757 pilot.

As stated previously, it was no easy task to gain the trust of employees however, through a deliberate and focused effort on the part of Bethune and his management team, Continental realized major change towards the positive, which was in large part due to Bethune’s ability to touch hearts and minds.

Continental 757
Continental 757 | Source

Demonstrating Empathy

As organizational leader of Continental, Bethune took over a company in 2004 where employees felt management did not care about personal lives. The previous chief executive, Frank Lorenzo, in large part helped to create this perception. Under Bethune’s leadership, employees of Continental experienced a sea change in this area. Bethune demonstrated empathy for employees in the following ways:

  1. Actively listening to worker concerns.
  2. Restoring some pay and benefits.
  3. Personally reaching out to employees by telephone during personally difficult times.

As with other areas of change at Continental, the process of change was challenging and slow. In time however, workers understood they had an organizational leader who truly cared about the work being conducted and their personal lives.

Should Continental have merged?

See results

Positive Impact on Organizational Culture

Gordon Bethune’s positive impact on the organizational culture at Continental Airlines cannot be understated. The previous chief executive at the airline had created a climate of fear, uncertainty and doubt with a high degree of acrimony. Employee groups routinely went to battle with one another and created what Bethune described as “caustic environment.”

Through Bethune’s GFP, he and his leadership team led by example and empowered a massive change in the organization’s culture, moving a company from a culture of apathy and acrimony to one of prideful work and harmony. This is not to state that everything was perfect when Bethune led Continental however, the positive impact he had on the company’s culture was evident according to most metrics used at the time to measure employee satisfaction.


The process of leadership is multi-factorial and can have different meanings to different people. Because one is in a position of authority does not mean they are necessarily a leader.

In the case of Continental Airlines, this was indeed the case when comparing the management styles of Frank Lorenzo vs. Gordon Bethune. Where Lorenzo was seen as a person of authority, he was not considered to be a leader by most all employees. Bethune on the other hand was seen as an authority figure and leader by workers. He helped to transform a failing airline into a profitable, reliable and powerful airline. Bethune, by most all measurements of success, demonstrated exemplary leadership at Continental.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.


    0 of 8192 characters used
    Post Comment
    • aerospacefan profile imageAUTHOR

      John Lannoye 

      16 months ago from Chicago

      Thanks for this kind comment Jean!

    • Jean Bakula profile image

      Jean Bakula 

      16 months ago from New Jersey

      I use Continental whenever possible, it offers the most nonstop flights in the NJ/NY area. I also like the the management style described in this article. I learned it was the best one years ago in a Business Management class. Treat your people with respect, listen to their concerns, and in turn they feel good and motivated at their work. It's a sure win/win.

    • profile image

      Gary Sachs 

      4 years ago


      What a waste, for Continental to have to endure.

    • profile image


      4 years ago

      Nice article. Gordon is an amazing keader, and I am privileged to have worked with him. One correction in your timeline: When Lorenzo left in 1990, Hollis Harris, the President of Delta, took over as CEO. He was well liked by employees, but the board fired him because he was against layoffs during a financially difficult time. Bob Ferguson took over, and led the airline through the disastrous Cal Lite experiment. Boeing was a large stakeholder in the airline and wasn't happy with its performance, so they insisted that Bethune, a Boeing exec, be inserted as President. Ferguson was fired shortly thereafter, and Gordon was promoted to Chairman and CEO.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)