Internal PR keeps Continental flying toward profit

  By SHERRI DEATHERAGE GREEN

PRWeek USA , Feb. 18, 2002

            Corporate PR people often seem to hear their mothers’ voices telling them, “If you don’t have anything nice to say, don’t say anything at all.” Troubled companies usually keep their lips zipped, and trouble is in no short supply for the airline industry. Still, Continental Airlines keeps talking.

            Maybe that’s because its news isn’t all that bad, comparatively. Before September 11, when airlines already felt the recessionary bite, only Continental and cross-state rival Southwest Airlines were turning profits. Now, Continental has its sights set on becoming the first hub-and-spoke carrier to regain profitability, a goal it hopes to achieve by July.

            Back in 1994, however, Continental wasn’t communicative. And the news it didn’t want to discuss was bad, recalls Mike Boyd, president of the Boyd Group aviation-consulting firm in Colorado .

            What is now the country’s fifth-largest airline fell on hard times in the late 1970s. Corporate raider Frank Lorenzo, who had purchased the bankrupt Texas Air six years earlier, bought Continental in 1982. Lorenzo added Eastern Airlines, People’s Express, and Frontier Airlines to the family in 1986 as Continental emerged from its own Chapter 11 ordeal. To cut costs, Lorenzo broke union contracts, leaving the workforce alienated and bitter. The succession of 10 CEOs over the next decade didn’t do much for morale, either.

            Then came CEO Gordon Bethune, the son of a San Antonio crop duster, one-time Navy aircraft mechanic and former Boeing executive. Bethune and Greg Brenneman, who would later serve as his right hand, hatched what the company still calls its Go Forward plan. Go Forward became Continental’s four-chapter bible. Like a true zealot, Bethune staged a book burning using the company’s then thick and excruciatingly detailed employee manual as fuel. The new commandments were much simpler: Fly to Win, a marketing focus that cut unprofitable routes; Fund the Future, a financial strategy that included restructuring loans and paying them off early; Make Reliability a Reality, a product plan aimed at improving on-time arrivals and baggage handling; and Working Together, the so-called “people plan” to build a new corporate culture. Bethune preaches this gospel regularly and seems to shoot straight with the public and employees. “Having a CEO who tells it like it is without any pretense is a real asset,” Boyd says.

Change requires action

            Some who have tried it might marvel at Continental’s success in remaking a corporate culture once so bankrupt of trust. “Sometimes it sounds like a lot of lip service,” senior employee communications manager Beth Dombrowa says of companies promising change. “You've got to actually do it.”

            For Continental, that meant putting its money where its mouth is. In 1995, Bethune told workers they would get $65 bonuses each month Continental’s on-time performance ranked in the top half of the industry. It didn’t take many such checks for employees to take Bethune seriously. The airline went from the bottom of the US Department of Transportation’s airline performance ratings to the top tier. Employees with perfect attendance also get quarterly bonuses, and their names are put into drawings to win Ford Explorers.

            A surprising degree of longevity exists in Continental’s corporate communication division, especially given the company’s parade of CEOs. In his 18 years with the company, PR managing director David Messing watched several come and go. “Now, communications comes naturally,” he says. Under previous administrations, the PR staff could usually lead management to the proverbial water, but today’s executives run ahead and jump in with snorkel gear. “When management wakes up in the morning, it’s “What do we need to tell people today?’ ” claims Messing.

            Bethune recognizes, however, that he’s not always the best person to deliver the message. “To be honest, I’m not a nice-enough guy,” he stated in “From Worst to First,” the 1998 book he coauthored with Scott Huler. “I let people who are good at that do it.”

Spreading Continental’s message

            SVP of corporate communications Ned Walker says he enjoys autonomy, support and a seat on the management committee. For example, in the weeks after September 11, the PR staff picked up on a perception among international press that the US was under siege. So, they invited 60 foreign journalists to New York for three days, taking them to Broadway, Grand Central Station and Wall Street to prove that the Big Apple was functioning normally, except for the area nearest the World Trade Center . Bethune did his part by appearing at a press conference with Rudy Giuliani. The PR staff also arranged for radio personality Bruce Williams to hop the globe on Continental planes in late September to demonstrate the safety of commercial flight.

            However, the last of Bethune’s four commandments comes first: keeping its transient workforce informed. After the terrorist attacks, the company’s first priority was to let staff know that World Trade Center employees were safe and that all planes were accounted for. The employee communications team worked 24-hour shifts during the crisis.

            Workers also were told about post-September-11 furloughs a few hours before Continental gave reporters the news. The airline was the first to take such measures, and Bethune was the first industry leader to bring up the need for government financial assistance. Unfettered by the criminal investigations that constrained American’s and United’s communications efforts, Bethune was able to take on the role of industry spokesman. He was the first airline CEO to go on national TV after the disaster, doing interviews on NBC, CNBC, and ABC the following Friday.

            The corporate communications office wasn’t immune from the furloughs that claimed some 20 percent of the workforce. The staff shrank from 27 to 24 employees, Walkers says. Outside agencies also agreed to Continental’s request to cut billing rates by 20 percent after the tragedy. As agency of record, Hill & Knowlton’s Houston office forms the hub in a crisis-communication support network. Continental also works with The MWW Group on projects, including the recent unveiling of a $1.4 billion expansion at Newark airport.

            Reporters who cover the company say its leader and PR staff are responsive and available in good times and bad. Even Marvin Zindler, the notorious Houston consumer-affairs watchdog on whom Dom Deloise’s character in the Best Little Whorehouse in Texas was based, can’t find anything to criticize.

            Continental undoubtedly faces more challenging times ahead, including upcoming labor negotiations that could potentially rock its placid employee boat. From a communications standpoint, however, the airline still stresses messages aimed at differentiating itself from troubled competitors, but now also focuses on security, Messing notes. Early on, Bethune spoke out in favor of government-run airport security and reinforced cockpit doors.

            But even in these dark days for the airline industry, long-term employees no longer worry about their company's integrity or longevity. “People like to pull for a winner,” Walker says. “This is an industry that doesn't usually have a lot of winners, but we are one.”

Read more airline stories:

 On a wing and PR

American Airlines braces for most turbulent journey

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