Continental Airlines – 1934 – 30Nov2011

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The two airlines formed by Jim Varney are now one. Even though corporate combination was concluded a year ago, today at midnight GMT, Continental and United operated under a single operating certificate. Although it is Continental’s operating certificate that survives, at 1200 Zulu 30November2011, the Continental call sign is replaced with the UAL sign – “UAL”.

I have been a lover of all things Continental since 1984. Only weeks after I moved to Houston, Frank Lorenzo‘s Texas Air Corporation acquired Bob Six’s Continental in a hostile take-over financed by Continental’s cash assets and business assets. “Frank”, as he was widely known throughout his tenure raping and pillaging first Texas International, then Continental, then Eastern, then PeoplExpress (including Frontier), was a master of using the Federal bankruptcy courts to accomplish his goals. In 1983, Frank threw the whole kit and kaboodle into bankruptcy to avoid (cancel) the union contracts that came with the Continental Airlines acquisition. ALPA struck Continental in bankruptcy, only to discover that the world had moved on and that the pilots’ strike wouldn’t cripple operations as it had in the past. Frank also started up a new, non-union shop in New York called “New York Air“, leveraging Continental’s resources and certifications.

Through tribulations, the Continental employee base struggled and achieved. From a West coast niche airline, Continental briefly enjoyed being the world’s largest airline when Frank insisted on a “mash-up” of Continental, Frontier, PeoplExpress, New York Air and what remained of Eastern on a single day without much in the way of planning.

I’m sure that my love affair with Continental stemmed partly from they’re being a local company to Houston. My best friend Scott working for them, and being on of the funniest, more engaging people I’ve ever known certainly brought me in more tightly. Before I met Scott, though, I was a charter member of Continental’s TravelBank – their frequent flier program which was supplanted by the absorption of Eastern’s much larger OnePass program in 1986. I still have my first day of issue OnePass card with a number so low that it makes gate agents eyes pop when I’ve pulled it out of hiding. I’m going to miss having that number.

Continental went from “worst to first” with the arrival of Gordon Bethune. More than six years ago, I noted that Continental was the first North American carrier to come close to replicating Pan Am’s global route system. Now, with the United merger, they have exceeded that measure.

As a merged entity, United  is the only world carrier with a multi-hub presence that reaches every continent save for Antarctica. Sure, the big European carriers also go everywhere, but they are all based in a single hub city – their travel is in/out from that hub. Two trans-pacific hubs, nearly three. Two Latin America hubs, four transatlantic hubs. As they merge into a cohesive operating unit, they’re going to do some serious corporate combat, especially in the Latin American, northern Pacific and European/South Asian routes.

 

Continental, from Bob Six’s glory to Gordon’s army of zealots, has always made less work harder. When Bob Six ordered 707s from Boeing, he had his engineers create a unique, new maintenance check system that performed the lighter checks during RON, rather than taking them off line and routing them into maintenance. This allowed him to run his six 707s as if they were eight or maybe even nine, even allowing Continental to run TWA out of the ORD-LAX competition. During Gordon’s day, the DC-10 and then the 777 fleet were utilized upwards of 20 hours out of 24. Scheduling kept everything on a hot boil, and the tight ship produces revenue multiples that most other network carriers couldn’t understand.

 

Given that it’s Continental’s ops certificate that will survive, and given that Continental ops/scheduling seems to be prevailing in the merged entity, what kind of 800 pound gorilla will United be with significantly higher utilization? A dominant 800 pound gorilla, that’s what.

 

Although they will thrive, and will be the dominant international network carrier, the days of a DC-10 pub service, of the Proud Bird with the Golden Tail, of BusinessFirst being competitive with International First, of an energized and exuberant work force making things happen for a large customer base that prides themselves on knowing the Continental “secret” are well and truly over. Nothing of United’s merged behavior conveys that the new carrier’s “pizza” will be all that different from anyone else’s.

 

Rest well in our memory, Continental Airlines. May your name and your history rise to rank with that of Pan Am, Braniff and others that led the way with you.