Continental Airlines chairman and chief executive Gordon Bethune will leave at the end of 2004, earlier than his planned 2006 retirement, in a move that has ended a long-running boardroom feud with director David Bonderman.
Continental president Larry Kellner will now oversee Continental's integration into its domestic alliance with Northwest and Delta, and the integration of that three-way partnership into SkyTeam. Kellner, 44, is loyal to Bethune, having joined the airline shortly after Bethune, now 62, joined from Boeing.
Bonderman, chief executive of the Texas Pacific Group and a director of European low-fare carrier Ryanair, is to leave the board in March. Bonderman's interests in rival America West Airlines and his aborted plan to acquire control of US Airways drew harsh criticism from Continental's unions. Bethune has described it as a long-running distraction. Another Texas Pacific director will also leave the airline's board in March. Standard & Poor's analyst Phil Baggaley says the Texas Pacific exit "settles uncertainties".
The move, says MergeGlobal consultant George Hamlin, "is the first orderly airline boardroom succession we have seen since the attacks of 2001". Hamlin suggests that Continental promoted Kellner to keep him from being hired by a rival at a time of rapid executive turnover.
Continental's pilots' union praised Kellner, who has also served the airline as chief financial officer, chief operating officer and a director. The Teamsters, who had been most outspoken in their opposition to Bonderman's continuing role, called the Texas Pacific departure "the right thing to do". Bonderman had sold his stake in Continental some time ago, says Texas Pacific.
Baggaley calls Kellner "a skilled executive" and says he expects a better financial performance from Continental than from other network airlines. He says the airline has more than enough cash on hand. Bethune managed to keep Continental from going back into bankruptcy during his tenure. The airline had two previous reorganisations under earlier management including that of Frank Lorenzo, and Bethune earned a reputation in the industry as a turnaround expert.
Kellner displays a different personality than the outspoken and sometimes boisterous exuberance that made Bethune a leading industry figure. Bethune has denounced airline management as "stupid people" and in 2002 called United's new chief executive, former oil industry executive Glenn Tilton, "clueless" about the industry.