In the 1990s Continental Airlines was struggling, even more than its troubled U.S. airline peers. As the company’s then-president Greg Brenneman explained in a 1998 article in the Harvard Business Review (HBR), “Continental ranked tenth out of the ten largest U.S. airlines in all key customer service areas as measured by the Department of Transportation: on-time arrivals, baggage handling, customer complaints, and involuntary denied boardings.” The airline had already been in bankruptcy twice, and was headed for a third round as its cash dried up.
In 1994, Gordon Bethune took the helm, with Brenneman becoming president and chief operating officer. They staved off bankruptcy by renegotiating with their creditors. And they launched an organizational turnaround that proved remarkably successful, catapulting Continental from worst to best among big U.S. carriers.
By 1995, Continental was moving up on the Department of Transportation’s (DOT’s) performance measures (see Figure 1). Its stock price was soaring. And the turnaround stuck. The latest rankings by Consumer Reports place Continental first among the seven big U.S. airlines. Zagat’s 2007 survey of frequent flyers found overall ratings for the big airlines were low and declining, with the “notable exception” of Continental. Continental was the only big airline, and one of only five overall, to be a Zagat Top Spot.