we don't know what CO got out of Boeing for the delays, but Larry may very well have done well. We do know that they have tremendous flexibility with regard to their orders and what models they can take and when.

in some ways, CO is beneftting by not having all that slack capacity.

Agreed on the Boeing relationship with Bethune (for obvious reasons).

Had Bethune remained as CEO of CAL it is certainly not inconceivable that things would have turned out largely the same, I don't dispute that.

But what we do know, as you say, is that both men have a vastly different style of leadership, and style of management, as well. Bethune always believed in the value of product, that adding value should always result in adding profit.

Kellner, as befits his background as a accountant, believed that the bottom line should determine the product.

I think if you look at the tenures of these two CEO's that was the main difference. Bethune ran into a lot of hot water (including with Bonderman and TPG) for his steadfastness in maintaining the product, even if it cost $$$ in the short-term.

And that was one of the first things to go when Kellner acceeded to the top. Quickly, he put an accent on cutting costs and adding revenue by reducing the value to the customer.

On the surface, this strategy should have worked brilliantly, but CAL's financial performance has not improved substantially under Kellner's tenure, and its reputation as the exceptional airline has suffered mightily.

So, in comparing the "product-first" mentality of Bethune vs. the "bottom-line first" mentality of Kellner that you speak of, what do you see on the horizon with Smisek? He already came out in the media and said that meals at mealtimes might be gone soon, so I am curious to see what you and others are anticipating...

This is a great thread...^

My crystal ball isn't working all that well right now

All I know is that comment about meals, so this is not a sign that the Bethune approach is likely to make a comeback any time soon.

I wonder, though, with the UA integration, if Smisek might give E+ a closer look?

I actually think E+ can be a big success financially, even if UA has never made monetizing E+ a major priority.

Kellner took over the best network airline and he leaves it to Smisek. My fear with Smisek is the Continental starts resembling UA instead of vice versa. I've always enjoyed flying with the airline the works hard and flies right.

This is my sentiment exactly. I don't know enough about Jeff's vision or style to be overly concerned or complacent at this point, though.

I think Larry did a good job of steering CO through some of the most turbulent times for the industry since the early 90s. Remember though - Larry was first and foremost a numbers man. Although he agreed in the principle of spending a $1 to earn $1.10, I think the product and feature-set might have evolved differently if he had a marketing background.

I would like more insight into Jeff's background and philosophy. That will help us better understand the changes that could be coming - or the potential for things to remain generally the same.

Cigarman is right - and without his open dialog with Larry and Larry's willingness to listen, we'd have half (or less) as many F seats, not to mention some likely negative changes to OP regarding upgrades in general.

You hit this one on spot on, IMO. I did not get a good gut feeling with this Smisek guy at the DO and my gut has never been wrong. I've already blacklisted two airlines....i'm hoping I won't have to go shopping again for a new home.

You'd have to be a board member to know for sure, but I believe Kellner was "invited" to retire for a few good reasons: 1) disastrous handling of fuel hedging over a period of years, 2) failure to reach accommodation with the pilots on scope - thus the DH4's, 3) allowing Biz/First to lose its polish (and profitability), and 4) overpaying for LHR access.

It's easy to say some of this criticism is just hindsight, but the cumulative result is that the company cannot reasonably predict a return to consistent profitability. Somebody had to pay and Mizner's departure wasn't enough.

A very differant point seems to be missed in this debate. CO was at very differant point in its history and times in the history of the industry and needed very each differant leaders in each.

Gorden was the perfect inspirational leader needed at the time to save the carrier. That was done. In this enviorment since a hard nose business man who was focused on costs and maximizing revenues was the key to survial.

TWA, you seem to be moaning more about the lost industry that we will never see again, more than CO or it's the leadership. It's here to stay in the industry.

Larry was likely the right person at the right time to move CO through this last period. Now he has moved on to make more money. Few truely great exes want to stay in the airline industry anymore when you can make far more moeny in other industry's and i don't fault him for that.

While Larry's responsiveness is to be commended, it's important to keep in mind that this is essentially part of CO's Customer Service arm. In the context that WE CARE routinely fails CO's customers, people are driven to write to the CEO or another exec.

How often does one actually feel the need or desire to write a company executive? A healthy organization has a working CS organization that is empowered to fix problems, and also collects, aggregates and reports data. There are plenty of examples of airlines and other industries doing just that without customers having to write the CEO.

While his responsiveness is to be applauded, it's also a testament to how poorly his CS organization is doing. If customers do not believe they can write in and have their concerns taken seriously, he should have worked to resolve that issue.



How is an event like that representative of the employees? Obviously the customer-friendly ones are the ones who would want to work those events. Some bitter FA, or some shenanigans-pulling GA is not about to sign up for something like that. We never met anyone from WE-CARE at the DO's did we?


I'm not sure I understand what the difference is. These days CO's main differentiator is a free sandwich, at least in Y.




Likely not a popular view on this board, but it's quite possible. From a FF perspective, many of the negative changes that were put into place during Larry's tenure have been reversed with this change. Plus you look at CO's current position w.r.t. the joint venture, vs. CO's previous protectionist attitude towards codeshares and multi-carrier itineraries, and a lot of these changes began to come to fruition just as Larry's departure was announced. It may be coincidence, it may not be. We'll likely never know.



While I agree with this rationale, but it would make more sense if CO didn't promote from within for the CEO positions. If they were looking for a CEO to do XYZ, theoretically they would recruit from the outside to find the right person, not take an existing executive and see if they'd make it as CEO.

CAL decides to name a 777 after Bethune...they pick ship #001.
CAL decides to name a 777 after Kellner.... they pick ship #019.
There are 18 other air carriers in the US....hmmm...coincidence?

I'm on board with all all your points here with the execption of one.

No major airline is any position to go recurit from the outside. The airline industry simply cannot affort any top exec that is good. It's not an industry the top guys will enter now. So they have to take what they have. Really as simple as that.

It's also total bs that Larry was forced out. He did his time at CO and off to make the really big bucks in his career. He will make 3-5 times as much in his new gig over the next 10 years.

Another Monday quarterback post if you ask me. I fly CO and other airlines and, while things have changed since Bethune left, I can honestly say that I am more confident and comfortable flying CO than any of the others. While they have done things I don;t agree with, I am not the one looking at the entire situation like Larry and only look at it from a customer (me) service standpoint. They continue to perform better in that category and I think anyone who thinks Smisek will do any better is wishing on a star; the further removed from your wonder years and leadership (Bethune in OP opinion), the more likely to have less committment to those leadership ideals

While I agree that CO has issues in their CS department I'm interested to hear what airline(s) you think do it very well and what your definition of doing it well is? Consistency? Oodles of compensation for any call? Something else?

CO has kept all CS functions on-shore and continues to answer the phone when you call, things that a couple other carriers have chosen to stop doing. And reading the other forums here it doesn't seem so much that CO is necessarily significantly better or worse than other carriers; there are plenty of complaints everywhere.

My point was actually the opposite, namely that as the industry's historic retrenchment into lowered expectations was well under way, CO remained steadfast in its exceptionalism. On paper, this policy surely cost them a few bucks, but it paid handsomely in a well-deserved reputation for superior service.

It is only under Kellner's leadership, and most markedly at the end of his tenure, that this commitment was dropped. I agree, though, that it is highly unlikely that we will ever see a revival of CO's exceptionalism.

Perhaps the clearest indication of the wrongheadedness of this approach is in the numbers. Throughout the Bethune era and at the beginning of the Kellner era, CAL always exceeded average industry performance, even if it lost money.

Now that Kellner has morphed the product into an essentially indistinguishable version of the average mediocre legacy carrier product, CAL results have dropped and are squarely in the middle of the pack.

Of course, there are many explanations possible for this drop in performance, but it should not be surprising that mediocre product would result in mediocre financial results.

Finally, in the post-Lehman era, all legacy carriers that depend heavily on premium-class travellers for their profitability have suffered, CO included. It is indeed no surprise that carriers such as B6 and WN are doing the best (although even WN is losing money), since their business model does not depend on premium class customers.

In this climate, just imagine how CAL might have done better if they had aggressively retained some elements of their exceptionalism, especially in the economy cabin? Instead, as blakefish and sbm12 and others have pointed out, CO's Y is just another legacy product, essentially indistinguishable from any other.

Again, a mediocre product will result in mediocre results.

Not only did it not have to turn out this way, but I believe CO delivered itself a tremendous blow in the race to the bottom it conducted under Kellner.