CONTINENTAL AIRLINES

Introduction
Continental Airlines was founded on 1934.It was named as Varney Speed by founders called
Walter Varney and Louis Mueller at EL Paso, Texas. In 1937 it was named as Continental
Airlines and was moved to Denver, Colorado. It had participated in world war to expand its
business by providing transportation service to the military. In 1950 Continental Airlines was
merged with Pioneer Airlines. It used to operate 7 days a week in the route of Chicago & Los
Angeles. With the Deregulation Act of 1978 Airlines started to exercise freedom by expanding
their routes by being flexible which helped them in expanding their business in new markets.
During those days Continental had more than 100 aircrafts.
In 1983 there was a huge loss for Continental due to rise in fuel prices. To manage the loss it
started to participate in air wars with a hope to earn profits and manage the loss. On 1993, 90
Boeing aircrafts were purchased and it was financed by its new partners like Air Canada (Seat
Maestro

2009). It helped to manage the loss business and turned it into the profits. Today it is

known as the worlds fifth largest Airline Company. Continental important assets were its
employees.
Strengths
Continental always tried to take suggestions from the consulting companies like Bains
consulting. Certain factors related to finance were tracked on a routine basis.
It managed its bankruptcy by managing various cost by framing appropriate decisions Such as
efficient hiring system and reducing other finance based activities.
Team based working system was developed for the successful completion of the work.
Weakness
It was unable to change as per the time because of its inefficient management system.

Poor services were being offered to the customers.

Continental management was dysfunctional to fix the problems because leaders did not have
their stability at top Positions.
Continental Airlines Employees/staff
Employees had to qualify certain tests like IQ, Tests, get the things done properly and have a
team spirit. Employees performance was linked with the rewards and recognition. People who
did not have any airlines experience were also hired by the management. Multi-tasking people
were required to perform the two jobs simultaneously. Employees were given training related to
the improvement in customer service and for better communication service.
As per Peter F. Drucker Theory of Business, Continental Airlines was to be one of the reputed
airlines Company known globally. Companys progress was measured against its
performance.New Markets were being approached by hiring the shops at various locations on
Lease Basis.
The interiors of the Continental was managed properly to attract the customers. It tried to take
care by reducing the mishandling of baggages, addressing customer complaints, and improving
the cleanliness. Proper communication channel was used to create a peaceful environment at
Continental Airlines. A proper working culture was created where people would love to work.
FOUR PLUS TWO FORMULA BY NOHRIA (4+2)
The four factors should be considered for the progress of any company. Those four factors
are strategy, Execution, culture and structure and also include the other elements like Talent,
Leadership, innovation, Mergers and partnerships (Harper Business

2003).

1. Strategy
It was framed by top management. It was based on grand strategies like merging continental
airlines with other global airlines of that time. It was based on innovation which was related to
reduce the other cost. The strategy of Continental Airlines was to be leading airlines of the world.

2. Execution
Teams were formed for proper execution of the activities. Everything was systematically planned
and organized in a proper manner. Poor decisions which were taken earlier were revised to grow
the business. Previously it was participating during the world War but later on its strategy was to
make is a customer based airlines service Company. Certain standard related to performance of
employees was set to check whether proper execution of strategy is being implemented or not at
Continental.
3. Culture
Proper corporate culture was followed by the pilots and the management to replace the old
culture by new one. After facing the loss a new working culture was developed to make it a good
working place.
4. Structure
It was following Formal Organizational structure where decisions were made at top level and
pushed down at lower level. They followed the fixed rules and the responsibilities. Centralized
communication flowed from top to the lower management.
The other factors related are listed below.
1. Talent
Appropriate talent Acquisition Strategy was framed to hire as per their requirement. Multi skilled
people were hired.
2. Leadership
The leaders were directive in nature and employees had to follow their instruction individually or
working in a team.
3. Innovation

They focused on providing the best customer services by maintaining their touch points.
4. Mergers & Partnerships
It was merged with several airlines companies to grow as and when required.
Strengths
Continental airlines have been known as one of the established airlines in the world. It has been
improving its operational performance by being located at various locations. It has been growing
due to increasing number of the passengers throughout the world. Due to Deregulation in the
aviation industry Continental Airlines was being merged with other several airlines to operate
globally. The new strategies framed after bankruptcy has been its strengths.
Weakness
Continental failed to manage its business due to the rise in fuel prices. Leaders at top level were
changing frequently due to ineffective style of management.
Continental Airlines
Continental Airlines five Leadership practices are listed below.
1. Challenging the Process
The leaders managed the challenge by managing the various financial crises. Appropriate action
plans were framed to overcome with such situations like Bankruptcy. Leader framed the
strategies which were being implemented by managers.
2. Inspiring a Shared Vision
Leaders at Continental wanted to lead the airlines business successfully throughout the world.
Leaders were directive in nature so that employees activities could be managed properly.
Messages were communicated from top level.

3. Enabling Others to Act

Due to Deregulation in the aviation industry many competitors were providing better services
than continental airlines but it managed to maintain success by working in team. Teams always
provided synergy effect in their performance.
4. Modeling the Way
The Leaders knew that customers get attracted with other lucrative services easily, so they tried
to maintain the quality services. Strong direction and turning around activities helped to manage
smooth functioning of the business.
5. Encouraging the Hearts
Leaders rewarded their performance of employees by offering incentives, increasing their pay,
motivating them to get recognition and etc (Jossey Bass

2010).

Conclusion
Continental Airlines merged with other airlines to explore the business but it also failed to
manage the change because every time leaders were replaced. The company did not have any
back up plan to manage during crisis in initial stages of business. After some years consulting
companies provided services to manage the business. They had directive leaders to manage the
talent in a team, innovate something new for the customers, and also link the rewards to their
performance of the employees.