Of course you do, why doesn't that surprise me!!!!

Now, back to our regular programming.......

Gordon and the Three S's will be playing their non-hit How to Screw the Employees and Collect Your Bonus.........

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"The Eyes of Texas Are Upon You"

[WAY off topic... sorry folks]

[This message has been edited by kanebear (edited 10-24-2002).]

This post is absolute speculative nonsense. Gordo's compensation was negotiated by CO's Board of Directors for the benefit of the company. He gets nothing more than what CO is obligated to pay him.

I can't imagine why employees' morale would increase if Gordo gave back his bonus. First, that money wouldn't go toward employee compensation, it would return to the company to help the balance sheet. Second, morale's gonna be crap regardless - the industry has been devastated. Employees are likely concerned about feeding their families. If it makes them feel better that Gordo gets less money (which is what you're suggesting), that's pretty sad.

*Furloughs and schedule reductions are strategic, not due to a lack of money. They are reactions to decreased (or shifted) demand.*

As a CAL investor and CO customer, I'd rather have a solvent airline than empowered front line employees. Keep in mind - every front line "empowered" decision that's made could be overruling a master plan strategy. (Explains the waviers & favors stuff.) In times like this, I think the company rightly values the master plan approach.

I think CAL has done a good job in the current environment. I can't think of an airline that depended as much on business travel as CAL that's done so well over the past year. That's largely due to good route management, fleet management and financial management. Keep your hugs and smiles for better times.

Sorry - forgot to add above:

CO has neither applied for, nor received loan guarantees that are currently being offered. Please be more specific about which subsidization you're talking about.

I hope you're not suggesting that CO shouldn't have accepted the grants given to all major airlines to compensate for 9/11 attacks, or that Gordo should feel some sort of responsibility . . . .

This statement is 100% wrong. I have NEVER been told that I am no longer empowered to make decisions. What I HAVE been told is simply to collect fees that are due. I can still "waive" a fee if I deem it the proper thing to do in a given situation. I simply need to "document the PNR" with a VALID reason for doing so. "No Waivers No Favors" is a policy that has been invented by FTers and is now taken as Gospel. It is not now nor ever has been an official policy of Continental. NOONE at CO has EVER been fired for "doing the right thing" for a paying passenger.

I agree 99.999% with your sentiments. CO (and for that matter, DL and NW) agents have not been disempowered to act as necessary for service recovery, etc. What HAS been discontinued is the practice of granting unnecessary waivers and favors which deprived the company of revenue and established unreasonable service expectations among customers.

FWIW, I don't find the term "No Waivers, No Favors" (originally coined by Deltoids) to have a negative connotation at all. No Waivers/No Favors is a business practice that EVERY airline of size should adopt, IMHO. I don't believe it's a mere coincidence that the airlines with the strictest policies against waivers/favors (CO, NW, and WN) are also some of the top financial performers in their respective industry categories.

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Thank you for choosing Continental Airlines, a proud member of the SkyTeam Alliance.

[This message has been edited by avek00 (edited 10-23-2002).]

JAWs,

Camera Guy's statment has absolutely no relevance to mine. I make no assertion of what GB should be paid nor any claim of his role in CAL's success.

The facts are that Bethune has been formally contacted by other airlines to take over as a the CEO (i.e. his unique skill set and talents are actively in high demand). That is a fact and has nothing to do with the idle speculation of what his role was in the turnaround of CAL. I think your issue is with those who are offering him these opportunities, not me.

10 years ago I told everyone who would listen NOT to fly CAL. Now, honestly, it's hard to find fault with just about anything they do that matters. Two points in all honesty:

l. Full coach passsengers might feel differently and:

2. It was a mistake (and I think an aberrant one at that) for GB- who is, let's face it an almost one of a kind CEO, who really did the impossible at CAL (Those who praise his team and not him should realize it speaks well of him that he's strong enough to pick a team of stars) in making CAL the best US airline, anyway, it was a mistake for him to say that the FFB program would not change and then to change it almost immediately (if I recall.) Can anyone disagree that this is a legitimate gripe? after all, in business you should carefully guard your cred. Nevertheless, GB's credibility remains (for me) pretty high- but that was not his finest moment. If you want to here Goredo listen in to the quarterly conference call in which he tells analysts that the fourth quarter will 'suck(s)' Now that's candor.

So the Bethune-bashing has reached the level of insinuating that some participants on this board are accused of getting graft from CO for saying nice things?

kanebear, you have an enormously inflated sense of self-worth if you think an airline would bother to reward someone to babble on like the idiots we are.

Other reviews of the criticism of Gordon and his bonus:

NJDavid thinks that Gordo the Liar is personally causing customer retention problems. NJDavid, you are a sample size of one. You and eleven other people you know are a sample size of twelve, not scientifically sampled. CO has had better-than-average performance in traffic and yield this year.

JAWS_II feels that because of Gordon's high school performance, he is not intelligent enough to appreciate that his employees are down in the dumps because he is still getting a bonus, and that this will cause employees to take it out on customers. This statement is about as meaningful and provable as the following: Would an employee feel better about working for a company with a CEO who has resurrected the entire company, kept it successful for years and made employee compensation much more competitive with the rest of the industry, or would an employee rather work for UA (CEO-of-the-month club), AA/NW (vitriolic management-labor relationships), US (bankrupt) or HP (bad labor relationships and nearly bankrupt)? The only employees who seem to be moving from Continental to other airlines are high-level executives, who seem to be in demand due to Continental's good performance.

To top this, JAWS_II followed up with the concepts that Gordon doesn't deserve a bonus because: What Gordon did 10 years ago he isn't doing today, CAL employees are actually the ones who accomplished Worst to First and that CAL has eliminated employee empowerment. As with movies, the sequel is always more disappointing than the original.

1) When Gordon took over Continental, his priorities were to improve the aspects of the airline that a) operated on time, b) got the bags there with the passengers and c) lost money. DOT data still shows that CO is doing a) and b) very well compared to the rest of the industry. I'd say he's still doing those things.

As for c), a) and b) happen to be more important factors than doing things like waiving excess baggage fees because the vast majority of travelers express a preference for arriving on time and with their bags, not getting waivers. I'm sure eliminating waivers costs CO some customers, but so did eliminating the GSO hub. You can only eliminate GSO once, so Gordon is trying some different things to make money. Based on the P&L, he seems to be doing a better job than his competitors.

2) CO has many fine employees. There are those who are fine employees who were with the airline before Bethune (BB), and they were probably equally good employees back then. CO has added tens of thousands of employees since Gordon came on, and obviously many of them are doing a great job as well. So either there were a couple of bad employees in the days BB who made the whole airline the basket case it was and they all quit after Gordon joined, and coincidentally CO has been incredibly lucky in recruiting ever since, or maybe Gordon had something to do with the change in performance.

3) CO has not eliminated employee empowerment, as per CALGal727. Instead of worrying about no waivers, no favors, consider whether CO empowers its employees to act in the customers' best interests when it comes to being on time, getting the bags to the right place, flying safely and keeping the airline in business so the customers can redeem their frequent flyer miles on occasion.

CO seems to be doing all of the above. Either Gordon is a genius or he's an idiot, and if the latter is true, Continental's employees must be very empowered.

TrojanHorse ties the issues of Gordon's bonus to "fowl ups" related to various fees and charges. TrojanHorse, prices are not set for what they cost to provide, especially for services. Prices are what the market will bear. Are Continental's price what the market will bear? Under Gordon's watch, CO has run a mass loyalty marketing program that has been very highly rated for many years now, in the industry that virtually created the mass loyalty marketing niche. Therefore, I think that Continental has a reasonable sense for what is acceptable and what is not. And TransWorldOne, charging a fee for a last minute reward is done on the exact same principle of charging higher fares for a walk-up ticket. Every single airline that makes money, from Southwest to JetBlue to Continental from 1995-2000, does this. Some industries exact a premium for perishable inventory, some don't. If you want to take advantage of perishable inventory, go to your local baker at the end of the day and get 8 donuts for a dollar.

Gordon is a brash, arrogant, competitive person who likes the limelight. He's not an altruist. He also took over an airline that was weeks away from a fourth bankruptcy (only after demanding, and receiving, a million-dollar bonus for leaving Boeing) and ever since has consistently outperformed its peers, operationally and financially. I think a big part of that change was orchestrated by Gordon and is a reflection of his personality. I don't expect him to change his spots when it comes to pay day.

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...or passengers swim.

[This message has been edited by Engines turn (edited 10-23-2002).]

I don't know a whole lot about airline executives, but I wonder who you guys think would be your first choice of CEO for a hub-and-spoke airline.

For me - John Kelly (AS), I think.

Last choice - Steve Wolf, hands down.

I know for a fact that that is hands down untue. Ed, you wanna tell them about your friend and being fired after the dinner?


Engines turn, you are the exact same sample size as me. I did not make Gordo lie in print, he did it himself. I did not make CO lay-off staff, reduce routes, have lower yields and show no profit, Gordo did that on his own. If I'm the problem (an attitude revealing your alliegance to CO - or your employment by them) then why does CO need to start charging for the toppings? Why are so many longtime passengers defecting? Why do CO staff refer to Houston as "Mecca" and complain about removed baggage allowance, removed travel passes, etc? Did you forget Joe Brancatelli's column , or is that my doing as well?

I hate to use the term apologist, but it is accurate. We have had a recent influx of them here on the CO board, making excuses for everything CO does. Guys, no matter how much you protest and claim that the dirt is gold, it is still dirt. You can't escape the truth.



[This message has been edited by NJDavid (edited 10-23-2002).]

Interesting theory. Wow, you honestly think this? This has not happened to other airlies b/c of the economy and terrorism? CO isnt recovering faster than the great majority of hub and spokes?

NJ, although I'm saying this tongue in cheek, but anyone who doesn't "know you" might wonder if you have pictures of GB taped all over a wall in a secret room in the basement of your house where you sit by yourself constantly mumbling, "Gor--don li--ed to me"?

Ahhh...the obligatory employment accusation. Don't worry ET, you arent the first who has been labled as such. God forbid you actually realize CO is not the worst airline on the planet...that they actually are a little bit ahead of the rest.

Pax defecting? Then where are they going? Why is CO's operating income holding up as well as any other hub and spoke?

Have you actually read the column recently NJ? Joe predicted doom and gloom for CO and he has turned out to be dead wrong. He claims the changes in policy CO announced would alienate pax, but according to CO's conference call (and backed up by their financial results) they have already begun to realize many of the predicted benefits from the plan.


No NJ...it is called informed discussion. Your smugness to simply dismiss (and label) those who disagree with you severely hampers your credibility.

Well, we all have our opinions about Gordon's Bonus. Of those of you that have expressed your opinions about Gordon's Bonus,

(1) How many of you obtain bonuses/commissions for revenue obtained by your employer?

(2) Those of you that are responsible for revenue, how many of you receive bonuses for losing less than you planned to lose, but you still have negative revenue?

I certainly realize that CEO's have different compensation plans than the folks that make "the rubber meet the road". I also personally know CEO's that receive nothing for "leading their company" to non-profitability, even though they improved quarter-over-quarter from, say, negative 10, to negative 5. The company is still non-profitable, it's just less non-profitable.

For those of you that are employed by CAL, I'm not be-rating your contribution to the success/failure of CAL to make a profit. In fact, most of the CAL employees that I see or meet are very nice people and the work that you do should be rewarded handsomely. My whole point in this Gordon's Bonus discussion is that one should not be rewarded for non-profitability.

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"The Eyes of Texas Are Upon You"

Time and again, the apparent disconnect between many FTers and the state of the airline industry rears its ugly head.

I can't help but laugh when I see AA and UA's business practices (e.g., Intl. UG policies) lauded as some sort of standard that CO, NW, and DL should follow. The bottom line is that DL/CO/NW don't want to go into bankruptcy, so they won't implement the kind of practices that will definitely cause them to go broke, like giving away your premium J product on a $500 r/t fare to Asia.

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Thank you for choosing Continental Airlines, a proud member of the SkyTeam Alliance.