Play Hard, Fly Right

  • The Boeing 767 jumbo jet is fresh off the shop floor, a sleek $138 million model made to order for Continental Airlines. But its pilot on this test drive is a little rusty and nervously wipes a hand on his khakis as he glides in to land on runway 14L at the Moses Lake test facility southeast of Seattle. With the plane just 200 ft. off the ground, a crosswind hits, and the co-pilot warns, in that dead-calm tone they all seem to learn, "You're on the left side of the runway." The pilot slides the plane back to the right and touches down with only a minor bounce. "Lot more fun than the office," says the pilot, Gordon Bethune, with a grin. "But I'm not quitting my day job."

    Bethune's day job gives him a far bumpier ride. The CEO of Houston-based Continental Airlines has piloted the nation's fifth largest passenger carrier through eight years of turbulent weather, bringing it back from the brink of a third bankruptcy in 1994. Nothing has been more challenging than the past nine months, with security hassles and terrorist fears driving away air travelers and costing the industry more than $9 billion. Continental was one of only two major airlines earning a profit before Sept. 11 (the other was Southwest Airlines), and Continental in March became the first traditional hub-and-spoke carrier to report a return to pretax profit. Alas, the bottom line turned red again in April, and Bethune predicts more rough weather ahead if the majors don't "wise up"--that is, stop adding seats and start raising fares. "It's a challenging business, which some of us thrive on," says Bethune. "I mean it's crazy as s___. I like it because it's never, never, never static."


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    Bethune delights in speaking his mind almost as much as he likes climbing into a cockpit. He says competitors trying to cut costs last September were "stupid" to take off magazines and meals in coach, a direct dig at Dallas-based American Airlines. He ridicules "an Atlanta-based carrier"--a reference to Delta Air Lines — for cutting back its sales teams that cater to major clients, to save money after 9/11. "We high-fived each other when we heard it," says Bethune, who promptly sent his pilots into corporate cafeterias to reassure business travelers about security measures.

    Bethune's trip to Seattle to pick up the Boeing 767 is a poignant sign of the times: it is one of the last jumbo-jet deliveries Continental will take until the second half of 2003, with the remainder put on hold until demand picks up. Bethune does a few touch-and-go landings at Moses Lake to test the new jet, No. 271 in the nation's youngest fleet (average age: 5.2 years), but he gives up the pilot's seat after an air-traffic controller, not knowing who's at the controls, suggests the 767 fly a tighter pattern to accommodate a military C-17 transport and a P-3 surveillance plane passing nearby. "Continental 9990, do you need to fly all your patterns that wide?" drawls the controller. "Uh, no," responds Bethune, laughing. After the next go-round, he retreats to the cabin.

    A high school dropout who became a Navy airplane mechanic in the late '50s, Bethune has managed everything from engineering and maintenance at Braniff to operations at Piedmont and 737 and 757 production at Boeing. Even now, as chairman and CEO of Continental, he tastes the food served on the planes (yes, even in coach) and dines on fast food at the airports (look for him at the Mexican joints). He monitors everything from airport decor (blue terrazzo wins out over carpet) to the number of public-address announcements. Pasta warmers and $330 wine-bottle openers don't rate even a question from Bethune, but he can wax enthusiastic over bigger luggage bins and more elbow room in the cabin. "Come back and look at this," he says eagerly, pointing out that 9 of every 10 seats on the new 767 are on an aisle or a window. "We found out customers would rather have an empty center seat" than have more leg room, he says, "so our seats are not as far apart" as those of some competitors.

    For Continental and its rivals, of course, the biggest challenge is using these come-ons to win back business travelers, who traditionally flew on short notice and paid full fares, often in the $2,000 range. A Business Travel Council survey of 184 groups that, combined, spend $2.9 billion a year on travel revealed in April that business travel is down 20% this year. Even worse, B.T.C. chairman Kevin Mitchell notes that 60% of the companies plan to cut further. Frustrated by ticket prices that skyrocketed 74% between 1996 and 2000, businesspeople are eliminating nonessential trips, hunting for last-minute cheap fares online, videoconferencing, or taking trains, private planes and even buses. "Some of these reductions are meant to be permanent," warns Mitchell.

    Bethune knows he has to chart his course carefully or risk going hat in hand to Washington for a taxpayer-backed bailout. He's already unpopular for leading the charge on Congress to grant a $15 billion aid package for the industry the first week after the attacks. "I ain't running for election here, pal," he says. "If we had waited another week to publicly acknowledge where we were, we'd still be arguing about it, and a bunch of us would be bankrupt."

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