Gordon Bethune

The compulsively candid, famously profane 63-year-old CEO of Continental Airlines on stepping down, managing up, life after 9/11, and why employees are like selfish fish.

Evan Smith: I imagine it must be weird for you to be stepping aside, on December 30, after a decade as CEO.

Gordon Bethune:  I’ve been trying to frame it. There are going to be days when I’ll wake up in the morning and I’ll really want to go to work—I’ll miss the hell out of this place—but I won’t be able to because I don’t work here anymore. Then there will be some mornings when I’ll get up and say, “Man, am I glad I don’t do this shit.” The transition will be tough, but at the same time, in many industries nobody lasts ten years. In this industry no one ever does. So I have to take some comfort in the fact that I did a good job. I must have. I’m still here, right?

ES: That’s awfully cheerful-sounding for someone whose board of directors essentially showed him the door.

GB: Well, I was part of the decision process. When it happened, it was by agreement. I was more than happy to leave provided some issues were cleared up at the company before I left. The board could always fire me, but they were not going to. So I had to say, “Sure, I’ll go. But this is what I want before I leave so that we don’t have anybody backpedaling on what we’ve worked so long to accomplish.”

ES: In fact, the sense out there in the world is that you were not happy to go.

GB: I don’t think you’re ever happy to give up a relationship that you love as much as I love this company. But it’s going to happen sooner or later. How many guys do you see stick around way after they should have left, right? So there’s a time to go. My time is probably now. It’s just as good a time as any.

ES: But you didn’t decide that. Someone forced your hand.

GB: Well, I did too decide it, because if I didn’t want to go, I wouldn’t be going. I would have told them to go blow it out their goat-smelling tail.

ES: You mentioned all you’ve accomplished. Tell me about it.  

GB: When I took over in ’94, we were like an airplane with an engine out, and the hydraulics weren’t working, and we didn’t know how much fuel we had. Today we’re at 30,000 feet, flying straight and level, going where we want, and both of our engines are running on adequate fuel.

ES: How did you get it back on track?

GB: We showed our employees that there was nothing wrong with us. When I came in, we got new airplanes at a cost of capital that was at a fifty-year low, so we had the tools. And what happened the next year? We had the same people flying to the same cities, and we were number one in on-time service, and we made a lot of money. There was nothing wrong with the people then, was there? Never was. Nothing wrong with the cities we served. Nothing wrong with anything. Once we pulled together in a common way, we were unbeatable.

ES: Not every airline is smart enough to focus on something as simple as self-confidence. They focus on more complicated things—and usually the wrong ones.

GB: Isn’t that sad? [Psychologist Abraham] Maslow talked about our hierarchy of needs, how it goes from oxygen to self-actualization. Most people want to f— around with the self-actualization: “Is my life meaningful?” Forget that. We need water and air down here! So a lot of airlines skip the part about “get the guy’s underwear to him” and worry about the goddamn movie. And they want to do market share as a metric of success. It’s not about market share. If you have a successful company, you will get your market share. But to get a successful company, what do you have to have? The same metrics of success that your customer does.

ES: So how’s your market share?

GB: It is what it is, though it’s growing. What I really worry about is a sustainable profit margin. Not revenue and not costs—margin. If you get focused on costs, you get into the whole spiral that Continental did before. We had the cheapest airline after Frank [Lorenzo] bankrupted the place. And we tore up our labor contracts and repudiated our leases and debt obligations, and then we almost went broke again in ’94. It isn’t about cheap. You can make a pizza so cheap nobody will eat it. You can make an airline so cheap nobody will fly it. It’s about the product and what people want and having our employees want to work here. A fundamental belief of this company is “Clean, safe, and reliable.” We’re never going to cut money so that we’re not clean, safe, and reliable for our customers. And we’re never going to cut money so that we don’t treat our employees with dignity and respect.

ES: Give me an example of respecting your employees.

GB: Every day for the last ten years we’ve done news updates. We post them on one thousand bulletin boards around the world, they pop up in your e-mail box, and they get transcribed and read into voice mail. There’s an 800 number you can call to get them. The updates say what our stock did that day, what our on-time percentage was, and what’s going on in the industry.

ES: That must have been a useful policy after 9/11.

GB: We had a hundred-and-fifty-something airplanes in the sky that day when the FAA ordered us to land at the nearest airfields. We didn’t know who was on our planes. We were all afraid, like everyone else. We had people scattered all over the world. Of course, we had a lot of young employees who didn’t know what was happening, and guess what they did when they got to their hotel rooms? Beep, beep, beep—on the phone to

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