History Celebrated by Continental Airlines

HOUSTON – Look out for a new Continental Airlines (NYSE: CAL) Boeing 737-900ER, which is painted with a retro livery to commemorate the airline’s 75th anniversary, which will be celebrated July 15, 2009.

The livery was was originally used on aircraft beginning in 1947 and is called The Blue Skyway, was picked by Continental employees. Continental flew the new aircraft to its three hubs for anniversary celebration events for employees and retirees. The aircraft made an appearance at Houston Bush Intercontinental on Thursday, June 25, and at New York/Newark Liberty and Cleveland Hopkins on Friday, June 26.

“I am proud to celebrate this exciting occasion with the Continental team, including both our current 43,000 co-workers, as well as the many retired co-workers who paved Continental’s history and made the airline what it is today,” said Larry Kellner, Continental’s chairman and chief executive officer, in a press release. “Not many 75-year-olds believe their future will be longer and more vibrant than their history, but that’s exactly what we’re looking forward to at Continental.”

The Early Years

Continental traces its history to Varney Speed Lines, started in 1934 by Walter T. Varney primarily to carry U.S. mail. On July 15, 1934, the airline launched its first flight, carrying 100 letters and no passengers between Pueblo, Colo. and El Paso, Texas. At the time, Franklin Roosevelt was president, the average U.S. annual income was about $1,600, a new car cost $625 and a gallon of gas cost 10 cents.

Walter Varney focused on the new airline’s fleet, called Continental “America’s Fastest” due to its speedier aircraft. A focus on a strong fleet is one thing that hasn’t changed over the last 75 years: Continental today flies the newest, most fuel-efficient jet fleet of all the major U.S. network carriers.

Varney earlier started a different airline, which became United Airlines. Later this year, the two carriers founded by Walter Varney plan to make an historic reunion by joining together as alliance partners in Star Alliance.

Longtime Leader: Bob Six

Varney Speed Lines became Continental Airlines in 1937 under the leadership of the legendary Robert F. Six, who captained the airline into the “jet age” and expanded its reach for more than 40 years.

Bob Six laid the groundwork for Continental’s reputation for top-notch service and a customer focus.

In 1944, passenger revenue exceeded revenue from carrying mail for the first time in the airline’s history. Under Six’s leadership, Continental in the late 1940s became one of the first carriers to experiment with coach fares, and established first-class “Gold Carpet Service” in the late 1950s.

“One thing that’s never changed goes back to Robert Six – we still want to give customers the best experience from the time they board the plane until they get to their destination,” says Houston-based Administrator of Manuals and Publications Jo Strauss, who has been with the company since 1968.

Bob Six also secured a Continental stronghold in the pacific by creating Air Micronesia, which remains a wholly-owned Continental subsidiary today.

Times of Tumult

In the late 1970s, following the Airline Deregulation Act, through the early 1990s, Continental went through some of its darkest days, struggling through years of financial losses, a gaggle of challenging mergers and acquisitions, and two bankruptcies, as well as labor relations that strained to the breaking point. Even through these grim times, several bright spots emerged: in 1987, Continental established its OnePass frequent flyer program, and in 1992, the airline launched its premium product, BusinessFirst, which provides first-class service at business-class fares.

In addition, Continental’s current domestic hubs were formed during this period. In the late 70s and early 80s, following deregulation, Continental’s presence in Houston, which began with the airline’s first flight into the city in 1951, strengthened into a true hub. In February 1987, Continental’s merger with People Express provided the foundation for the carrier to grow and develop a leading presence in the strategic New York market, transforming Newark Liberty into one of the world’s premier international global gateways. Continental remains the largest carrier in the New York area today. In July 1987, Continental’s Cleveland hub opened, tripling the airline’s presence in the city.

From Worst to First

Then, in 1994, Gordon Bethune became CEO and led the company through one of the most dramatic turnarounds in business history, taking it from “worst to first.”

Much as Six set the tone on customer satisfaction, Bethune brought to the forefront a culture of employees working together. Bethune and Continental’s senior management team also instituted the Go Forward Plan to make sure the whole team had their eyes on the same target. The same working-together culture and Go Forward Plan continue to underlie Continental’s success even today.

Continental Today

Current Chairman and CEO Larry Kellner, who has been with the company since 1995, took the helm when Gordon Bethune departed in late 2004. Larry credits Continental’s co-workers for the airline’s success in recent years. As chairman and CEO, Larry stays focused on open, honest and direct communication with co-workers across the system, taking input from all directions as the company faces today’s opportunities and challenges.

Symbolic of Continental’s focus on the future, the new retro-painted Boeing 737-900ER will be delivered equipped with an advanced technology GPS Landing System (GLS) that will take advantage of a new NextGen satellite-based landing system being installed later this year at Newark Liberty. Continental is partnering with the Port Authority of New York and New Jersey, the FAA, Rockwell Collins and Gables to make this technology a reality. This is just one of many NextGen technologies and capabilities that Continental has pioneered over the years as the airline works to make operations safer and more reliable, fuel efficient, and environmentally friendly.

Other firsts being initiated in Continental’s 75th anniversary year are the introduction of DIRECTV service, installation of flat-bed seats in BusinessFirst, and service to Shanghai.

“I have been here for over 28 years,” said EWR-based 757 Captain Tom Stephens. “I have worked with the best people that I could have wished for. There have been some serious ups and downs. There have been times when the future looked bleak and times when the future looked bright. Through it all we have survived and, for the most part, done it with good humor and the determination to get through the rough spots with confidence that there would be better days. We should look around us now with satisfaction at the Continental we each, in our own way, helped to create.”

For historical photos and more information on Continental’s 75-year history, see continental.com/company/history.


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