Case ID: 406073     Solution ID: 35039

Gordon Bethune at Continental Airlines Case Solution


A $385 million misfortune for the last months of financial year 1994 flagged Continental may go bankrupt. Could new CEO Gordon Bethune turn Continental around? Mainland was in critical straits in light of the fact that the business' deregulation aircraft industry in 1978 introduced another period concentrated on mergers and acquisitions and intense representative administration relations. Revered carrier brands with a pledge to quality, as Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his antagonistic takeover offer, strains raised in the middle of Lorenzo and the old watchman - particularly when Lorenzo pronounced Continental bankrupt in the fall of 1983 and afterward terminated and supplanted a large portion of his staff with less expensive nonunion work. In October 1994, five months after Continental left its second liquidation, Bethune was raised to CEO and made a Go Forward Plan to return Continental to productivity. Two years in the wake of disclosing the Go Forward Plan, Continental was at the highest point of the business in various imperative execution measurements.

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