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Case 29: Gordon Bethune and the
Turnaround of Continental Airlines

1. What accounts for the success that Gordon Bethune had in turning Continental around from one of theworst-performing airlines in 1994 to one of the best-performing airlines as of mid-2001? How did he do it? What 3 or 4 things provide the best explanation?

2. What grade would you giveGordon Bethune for the job he has done in crafting the Go Forward Plan at Continental? What is it that you like or dislike about the Go Forward Plan? Does it represent a “quick fix” or a“band-aid” for the ills that existed at Continental or does the Plan attack the roots of the problems that existed when he became CEO?

3. What are the key policies and operatingpractices underlying implementation and execution of Bethune’s Go Forward Plan?

4. How would you characterize the Continental’s corporate culture as of 2001? What are its key elements? IsContinental a strong culture company in the sense that the culture is deeply ingrained (like that at Southwest Airlines)? Why or why not?

5. What grade would you give Bethune forthe job he did in implementing and executing the Go Forward Plan prior to 9/11? What is it that you like most or dislike about the strategy execution approaches at Continental?

6.Were you surprised at the actions taken by Bethune in the days following 9/11? Did Bethune do the right things? Was his turnaround effort more fragile than you expected?

7. Whatculture-related problems do you foresee arising at Continental, given Bethune’s actions and the crisis at the company following 9/11?

8. What actions should Bethune and Continentalmanagement take in response to the reduced amount of passenger traffic and the company’s rapid cash drain as of Fall 2001? Prepare a list of recommended actions for the next 12 months.