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  • January 2006 (Revised July 2016)
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Gordon Bethune at Continental Airlines

By: Nitin Nohria, Anthony Mayo and Mark Benson
  • Format:Print
  • | Language:English
  • | Pages:35
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Abstract

A $385 million loss for the final months of fiscal year 1994 signaled Continental might go bankrupt. Could new CEO Gordon Bethune turn Continental around? Continental was in dire straits because the deregulation of the commercial airline industry in 1978 ushered in a new era focused on mergers and acquisitions and bitter employee-management relations. Venerable airline brands with a commitment to quality, like Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his hostile takeover bid, tensions escalated between Lorenzo and the old guard--especially when Lorenzo declared Continental bankrupt in the fall of 1983 and then fired and replaced half his staff with cheaper nonunion labor. In October 1994, five months after Continental exited its second bankruptcy, Bethune was elevated to CEO and created a Go Forward Plan to return Continental to profitability. Two years after unveiling the Go Forward Plan, Continental was at the top of the industry in a number of important performance metrics.

Keywords

Transformation; Insolvency and Bankruptcy; Profit; Leading Change; Organizational Change and Adaptation; Performance Improvement; Labor and Management Relations; Air Transportation Industry

Citation

Nohria, Nitin, Anthony Mayo, and Mark Benson. "Gordon Bethune at Continental Airlines." Harvard Business School Case 406-073, January 2006. (Revised July 2016.)
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About The Authors

Nitin Nohria

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Anthony Mayo

Organizational Behavior
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Related Work

    • January 2006 (Revised July 2016)
    • Faculty Research

    Gordon Bethune at Continental Airlines

    By: Nitin Nohria, Anthony Mayo and Mark Benson
Related Work
  • Gordon Bethune at Continental Airlines By: Nitin Nohria, Anthony Mayo and Mark Benson
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