Continental Airline

(Salvaging from the Ashes)

Presented By:
Muhammad Bilal Shaikh (1339112)
Faheem Sajid (1339105)
Reference:Chapter 10
Marketing Success and Failures 11Ed

Continental Airline
Introduction
Massive marketing and management blunders almost

destroyed continental airline, burden only a few years,

with a remarkable turnaround by new management
continental become a star of the Airline industry.

Continental Airline
Introduction
Massive marketing and management blunders almost

destroyed continental airline, burden only a few years,

with a remarkable turnaround by new management
continental become a star of the Airline industry.
In this case study we will look at the scenario leading to

continental difficulties and then examine the ingredient of

the great comeback.

Continental Airline
Lorenzo (CEO Continental
Airline)
In 1981Texas Air Corporation,

an airline holding company

controlled by U.S. aviation
entrepreneurFrank Lorenzo,
acquired Continental after a
contentious battle with
Continental's management
who were determined to resist
Lorenzo.

LORENZOS TREATMENT OF
CONTINENTAL
Continental's labor resisted Lorenzos tactics.
Labor believed that Lorenzo wanted to make a non-union

airline.
In 1983 Lorenzo took Continental into Bankruptcy court.
In 1986 Continental Emerged out Bankruptcy due to deals
with weak Eastern Airline.
Now continental with its non union workforce making it a
low cost operator.
Inconsistent planning
Poor execution characterize his lack of good operational
strength.
From 1983-1993 nine President left continental.

 He instituted of program of severe

downsizing . In 1989 some 8500 machinists

and 3800 pilots went on strike and then again
Continental Airline fallen into bankruptcy and
replace many of striking pilots and machinists
within month.
In 1993 the court approved a recognition plan
for continental plan to emerge from
bankruptcy.
The first airline survive to bankruptcy.

G reat com eback under Bethune

In 1994 Bethune joined continental as a

president .
And he faced daunting challenges.
On time percentage (land within 15 minutes)
Number of mishandled baggage report field per
1000 passengers.
Number of complaints per 100000 passengers.
In voluntarily denied boarding.

 In 1995 Bethune become CEO

and he made dramatic changes

through a renewed focus on
flight schedule and incentive
pay.
He greatly improve on-time
performance along with lost
baggage claims and customer
complaints.
In 1996 continental was
awarded the JD Power award as
the best airline for customer
satisfaction on flight 500 miles
and more.
In 1997 it was name Airline of
the year.

 Bethune had transformed the workforce into a

happy one has measured by three statistics.

wages up an average of 25%.
Sick leave down more than 29%
Personal turnover down 45%
Workers compensation claims down 51%
On job injuries down 54%

H ow did Bethune D O IT
Open door policy
Improvement in employee relationship
Improve the morale of their employees.
Bethune work hard instill a sprit of teamwork

by giving on time bonus to all employees not

just pilots.
He reject the legacy of cost cutting .
He even gave the plans a new paint jobs.
Better communication was also a key elements
in improve employee relation with the sprit of
teamwork.

 Bethune sort to do a better job of designing

routers with good demand to fly places people

wanted to go.
Company apologies to the travel agents,
business partners and customers.
Performance

 In 2006 awards continued to showered on the

airline.
Now continental running on the best business
class of any US Airline on the foreign routes
and best premium services on bet domestic
groups.
It catered to business travelers who paid the
highest fairs and flew most frequently with
more comfortable seats special waiting areas
and bags tagged for first unloading.

 You can make an airline so cheap no

body want s to fly it.