Continental Airlines
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Continental Airlines (NYSE: CAL) is a United States certificated air carrier. Based in Houston, Texas, it is the fourth-largest airline in the U.S.[1] and the fifth-largest in the world by revenue passenger miles. Continental's marketing slogan, since 1998, has been Work Hard, Fly Right. Continental operates to destinations throughout the U.S., Canada, Latin America, Europe, and the Asia-Pacific region. It has more than 3,000 daily departures, serving 151 domestic and 120 international destinations and has 42,200 employees (at March 2007).[2] Principal operations are from its three hubs at Cleveland Hopkins International Airport (in Cleveland, Ohio), George Bush Intercontinental Airport (in Houston, Texas), and Newark Liberty International Airport (in Newark, New Jersey). Continental Micronesia, a wholly owned subsidiary, operates routes around Micronesia from its hub at Antonio B. Won Pat International Airport on Guam and connects the Micronesian region with destinations in East Asia, Southeast Asia, Honolulu and Cairns, Australia. Continental Airlines is a minority owner of ExpressJet Airlines, which operates under the trade name Continental Express but is a separately managed and publicly-traded company. They are also a minority owner of Copa Airlines. Cape Air, Colgan Air, CommutAir, and Gulfstream International Airlines feed Continental's flights under the Continental Connection identity, as does Chautauqua Airlines under the Continental Express identity; Continental does not have any ownership interests in these companies. Since September 2004, Continental has been a member of the SkyTeam Alliance, in which it participates with Northwest Airlines, Delta Air Lines, Air France, Aeromexico and KLM. In addition to extensive code share arrangements with SkyTeam partner airlines, the airline also code-shares with Amtrak rail services to some cities in the northeastern United States, and with SNCF French Rail to destinations in France.
HistoryEarly historyContinental Airlines began service in 1934 as Varney Speed Lines, named after one of its initial owners, Walter T. Varney operating out of El Paso, Texas and extending through Las Vegas, Albuquerque and Santa Fe, New Mexico to Pueblo, Colorado. The airline started with the Lockheed Vega, a single engine plane that carried four passengers. The airline later flew other Lockheed planes, including the Lockheed Lodestar and the Lockheed L-9 Orion. It was renamed Continental on 1 July 1937 after a new owner Robert Six had taken a forty percent ownership with Varney's co-founder Louis Mueller. Six relocated the airline's headquarters to Stapleton Airport in Denver in October, 1937. Robert F. Six was one of the legendary patriarchs of U.S. aviation had a reputation as a scrappy, pugnacious and risk-taking executive who presided over the airline he largely forged in his image for more than 40 years.[3] During World War II Continental's Denver maintenance facilities became a conversion center where the airline converted B-29s and P-51s for the United States Army Air Force. Profits from military transportation and aircraft conversion enabled Continental to contemplate expansion and acquisition of new aircraft types which became available following the war.[3] Among those types were the DC-3, and Convair 240. Some of the DC-3's were acquired as surplus planes after WW-II. The Convair was the first airplane operated by Continental that was pressurized. The airline's early route network was limited to the southwestern United States for many years. In 1953, Continental merged with Pioneer Airlines, gaining access to 16 additional cities in Texas and New Mexico which integrated well with the carrier's initial El Paso-Albuquerque-Denver route.[3] GrowthBy the end of the 1950s, Continental Airlines had seen a broad expansion of its routes. In 1957 it flew for the first time from Chicago to Los Angeles (both nonstop, and via Denver); and from Denver to Kansas City. Continental Airlines introduced turboprop service with the Vickers Viscount 800 Series, on the new medium length routes. Continental was also an early operator of the Boeing 707, taking delivery of its first 707s in 1959. Six, not being satisfied with jet service alone, introduced dramatic service innovations with Continental's 707 operations which were described as, "...nothing short of luxurious" by the Los Angeles Times, and, "...clearly, the finest in the airline industry" by the Chicago Tribune.[4] Continental's initial purchase of the Boeing 707 jets was for four jets. The airline introduced a program of progressive maintenance in order to obtain the utilization rates for the jets needed to operate its schedule. That program was crucial to successfully operating with only four jets. Prior to the arrival of the Boeing 707 jets, Continental acquired DC-7's to operate its non-stop route from Los Angeles to Chicago. Beginning in the early 1960s Continental expanded rapidly, adding service from Los Angeles to Houston (both nonstop, and with services via Phoenix, Tucson, El Paso, Midland/Odessa, Austin, and San Antonio); and from Denver and to Seattle, Portland, New Orleans, and Houston (both nonstop, and with services via Wichita and Tulsa/Oklahoma City). In 1963 the company's headquarters moved from Denver to Los Angeles.[3] During the late 1960s, Continental replaced the Viscounts with DC-9s from Douglas Aircraft. The company also disposed of its piston powered airplanes, one of the first airlines to do so. The DC-3 was the final piston-powered airplane equipment operated by Continental. Throughout the Vietnam War Continental provided extensive cargo and troop transportation for United States Army and Marine forces to Asian and the Pacific bases. As a result of Continental's experience in Pacific operations, the carrier formed subsidiary Air Micronesia, picking up island hopping routes between Saipan/Guam and Honolulu, which Continental operated with 727 aircraft (this unit is currently known as Continental Micronesia). In 1968 a new aircraft livery was launched, the orange and gold cheatlines adorned with a black global circle on the jet's tails. The marketing slogan adopted in the late 1960s and used through the early 70s was, "The Proud Bird with the Golden Tail."[4][3] 1969 saw the introduction of service from Los Angeles to Honolulu/Hilo; and in 1970, Continental's first Boeing 747s arrived. McDonnell-Douglas DC-10s were added to the fleet in 1971. Continental was selected to serve the route from the Pacific Northwest to San Jose, Hollywood/Burbank, and Ontario, CA.[3] In the late 1970's, Continental even flirted with the idea of merging with TWA's ancestor, Western Airlines and their similar fleet of DC-10 "wide-body Spaceships", however this was not proceeded with as expansion was to take Continental down a much different path. Image:Continental 737.jpg
A Continental Boeing 737-824 taking off from Los Angeles for Houston.
Continental's growth during this period was about more than new aircraft types or additional route miles. Quality was the watchword in every detail of the carrier's operation; and in one anecdotal indication of Six's passion for premium customer service, every page of the airline's Customer Service Manual was inscribed with these words: "Nothing in this manual supersedes common sense." Bob Six relentlessly prowled the Continental system, as well as competitors' flights, to assure tight quality standards and to search for ideas that could be adopted to Continental's network.[4][3] At Six's insistence, Continental (with Pan Am) was a launch airline for the Boeing 747 aircraft. Its upper-deck first class lounge won awards worldwide for the most refined cabin interior among all airlines, as did meal services developed by Continental's Cordon Bleu-trained executive chef, Lucien DeKeyser. Continentals 747 services from Chicago and Denver to Los Angeles and Honolulu set the standard for service in the western U.S. When asked by one Denver customer service agent in 1974 why he flew Continental wherever he could, Hollywood legend Henry Fonda remarked, "This operation is class; strictly class!"[4][3] First black pilotIn 1963, Continental hired the first black pilot to work for any major carrier in the United States, Marlon Green, after a United States Supreme Court decision allowed a Colorado anti-discrimination law to be applied to his case.[5] Acquisition by Texas Air CorporationImage:Coa sign.jpg
Sign marking Continental's headquarters in Downtown Houston.
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Continental Airlines Boeing 777-200 at Cibao International Airport in Santiago de los Caballeros, Dominican Republic
In 1981 Texas Air Corporation, an airline holding company controlled by U.S. aviation entrepreneur and raider Frank Lorenzo, acquired Continental after a contentious battle with Continental's management who were adamantly determined to resist Lorenzo. Continental's labor unions also fiercely resisted, fearing what they termed as, "Lorenzo's deregulation tactics." In the end, Texas Air Corp. prevailed. Frank Lorenzo became Continental's new Chairman and CEO. Texas International Airlines (TI), another Lorenzo holding, was merged into Continental Airlines in June 1982. TI ceased to exist and the "new Continental" relocated its headquarters to Texas Air's base in Houston, Texas. The merger resulted in a large expansion of Continental's hub at Houston Intercontinental Airport and its extensive routes to Mexico.[4][6] Airline unions fought Continental at every step. In the Federal courts, they unsuccessfully sued to stop the company's reorganization. They were successful in working to persuade Congress to pass a new bankruptcy law preventing bankrupt companies from terminating contracts as Continental had successfully done. The law was too late to affect Continental and the drastic cost cutting and changes that had rescued it from liquidation.[4][6][7] First bankruptcyFrank Lorenzo took Continental into Chapter 11 bankruptcy in September 1983 after extensive negotiations with labor unions proved unsuccessful. Continental imposed a series of new labor agreement on its union workers, sharply reducing the airline's labor costs. This move made Continental vastly more competitive with the new airline startups then emerging and thriving in the southwestern U.S.[6][7] Much of the airline was liquidated and the company was rebranded as a low-cost carrier. Continental was also forced to abandon its hub in Los Angeles although it maintained its Denver and South Pacific routes. A more streamlined, leaner Continental emerged only a few days after the bankruptcy filing, a fact which gave Continental the distinction of being the first airline to fly through bankruptcy.[6][7] Rapid growth through consolidationIn June 1985, Continental rebounded as signaled by a major strategic move: initiating European service with flights from Houston to London. Image:Peter Max - IAH.jpg
Continental's Boeing 777 "Peter Max" (colorful airplane) at George Bush Intercontinental Airport in Houston, Texas. Downtown Houston is visible in the background.
. In October 1985, Texas Air Corp. made an offer for a Denver-based regional carrier, Frontier Airlines, opening a bidding war with People Express, which was headed by Lorenzo's former TI associate Don Burr. PeopleExpress paid a substantial premium for Frontier's high-cost operation. The acquisition, funded by debt, did not seem to industry observers be rational from either the route integration or the operating philosophy points of view, but was in the opinion of most industry analysts rather an attempt by Burr to best his former boss, Frank Lorenzo.[4][7] On August 24, 1986, Frontier filed for bankruptcy and ceased operations. With PeopleExpress hemorraging cash, Texas Air acquired PeopleExpress on September 15, 1986, at the same time gaining Frontier, which reinforced Continental's already formidable Denver hub. The PeopleExpress hub at Newark allowed Continental to expand its east coast services dramatically for the first time in its history; and the carrier soon became the third-largest airline in the U.S.. Continental emerged from bankruptcy in 1986 with dramatically improved asset and cash flow positions and a much more competitive route structure with routes radiating to every large U.S. city from major hubs at Denver and Houston.[7][4] On February 1, 1987, People Express, New York Air, and several commuter carriers were merged into Continental Airlines to create the sixth largest airline in the world. 1987 also saw the creation of the OnePass frequent flier program (jointly with Eastern Airlines), and in 1988 Continental formed its first strategic partnership (and the first international airline alliance of its kind) with SAS.[4] Second bankruptcy
In 1990, Frank Lorenzo retired after 18 years at the helm of Texas International and later Texas Air and Continental Airlines, selling the majority of his Jet Capital Corporation to Scandinavian Airlines System (SAS). According to William F. Buckley, in his September 17, 1990 article on National Review, the sale to SAS was conditioned on Lorenzo leaving the company. Shortly after Lorenzo left Continental, the airline filed for its second bankruptcy inside of a decade. There were a number of circumstances behind the second bankruptcy, most importantly: Lorenzo had dedicated himself almost full time to Eastern Air Lines acquisition and labor relations issues; the 1990 Iraqi invasion of Kuwait and the resultant Gulf War had prompted a dramatic increase in the price of jet fuel; and People Express had also been highly leveraged at the time of its merger with Continental, having purchased Frontier Airlines just two years before. In addition to Lorenzo embarking on deals which saddled the airline with other carriers' debts, he also began consolidating the different airlines into one system. That resulted in a fleet comprising numerous aircraft types, evident in the array of liveries in the Continental fleet for years to come. In the late 1980s, following a dramatic reduction of service by United Airlines and an unsuccessful attempt by USAir to build-up point-to-point service, Continental slowly moved into Cleveland Hopkins International Airport and established what would become its third-largest system hub. Continental quickly gained nearly all of the gates in the airport's C concourse (once dominated by United), and later expanded that concourse in addition to constructing an entirely new Concourse D. In 1993 Air Canada, along with Air Partners and Texas Pacific Group, aided Continental in coming out of chapter 11 once again by investing $450 million in the airline. Under the leadership of former Boeing executive Gordon Bethune, who became President in October of 1994, Continental subsequently ordered new aircraft in an effort to convert to an all-Boeing fleet. The airline's Denver hub - its historic operational base and headquarters for, in effect, almost 50 years - was reduced to spoke status (with service only to Houston, Newark, and Cleveland) in a further efficiency measure in 1995. Bethune also launched a 'Go-Forward Plan', designed to fix numerous other problems with the airline. His experiences were chronicled in his 1999 book From Worst to First.[8] Current operationsImage:Continental-Boeing-737-800.jpg
Continental Boeing 737-800
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Continental Micronesia Boeing 737-800 at Fukuoka Airport
Continental embarked on an ambitious program to expand its international operations. In 1998 it launched flights to Ireland and Scotland, and in October 1998 the airline received its first Boeing 777 aircraft, allowing non-stop flights from Newark and Houston to Tokyo, Japan and from Newark to Tel Aviv, Israel. Continental in the same year launched partnerships with Northwest Airlines, Copa, Avant Airlines, Transbrasil, and Cape Air, and Continental and America West Airlines became the first two US airlines to launch interline electronic ticketing. On March 1, 2001, Continental launched a non-stop flight from Newark to Hong Kong, flying over the North Pole, which was the first non-stop long-haul flight service for any airline with flying duration of 16 hours. The September 11, 2001 attacks and the SARS outbreak in Asia caused service to be suspended until August 1, 2003. The launch in 2001 started the battle between Continental, United Airlines and Cathay Pacific over non-stop flights between Hong Kong and New York. In 2005, Continental expanded service from Newark to Beijing after being awarded the China route. During the same year, five new European destinations including Oslo-Gaerdermoen in Norway, Stockholm in Sweden, Belfast and Bristol in the United Kingdom, and Hamburg and Berlin in Germany. 2005 was a year in which coverage in Asia was also expanded; Continental introduced a nonstop daily flight from Newark to New Delhi, India. With the immense success of this Newark-New Delhi route, Continental elected to open a second gateway in India. With the recent announcement of daily nonstop service to Mumbai, Continental will offer the most nonstop flights from the United States to India by any carrier. Continental also began new non-stop service to Cologne, Germany and Athens, Greece in 2007. By May 2006, Continental passenger traffic surpassed that of Northwest Airlines, and Continental became the fourth-largest U.S. carrier, the first change in the top-five rankings since 2001. The Wall Street Journal revealed on December 12, 2006 that Continental was in merger discussions with United Airlines. Of issue would be Continental's golden share held by Northwest Airlines, dating from a stakeholding relationship during the late 1990s, and the divestiture of Continental's Guamanian hub. A deal was not "certain or imminent," with the talks being in a preliminary state.[9][10] In mid-2007, Continental will feature docking capability for Apple Computer's iPod portable music and video player. This will allow the device's battery to be charged, but will also allow integration with Continental's In-flight Entertainment (IFE) system. This will also enable the IFE system to play music, television shows, or movies stored on the iPod, as well as function as a control system.[11] Recognizing operational capacity limits at Newark, Continental has begun further utilizing its Cleveland hub by developing more international services at Cleveland, altering its role from that of a reliever hub. On September 14, 2007, Continental announced a major two-year expansion of its Cleveland hub, including new service from Cleveland to Paris commencing May 22, 2008. Additional international routes are expected to follow, pending the completion of a newly-expanded Federal Inspection Services station in Continental's primary concourse in Cleveland. Domestically, the expansion will proceed in two phases. The first phase involves twelve new destinations to be served from Cleveland primarily on regional jets, with the new service in place by May 2008. Later, in 2009, up to 20 new destinations will be added, primarily on mainline aircraft. Continental states that the expansion will be complete in time for the summer 2009 travel season, and will result in up to 700 new jobs at its Cleveland hub.[12] Awards
Continental has recently earned other noteworthy recognitions and awards:
DestinationsImage:TerminalCBushAirportHouston.JPG
Continental operates domestic mainline flights from Lewis W. Cutrer Terminal C at George Bush Intercontinental Airport in Houston, Texas.
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Continental operates international flights and domestic flights from Terminal C at Newark Liberty International Airport
Continental Airlines operates primarily a hub and spoke route network with North American hubs in Cleveland, Houston, and Newark, and a mid-Pacific hub in Guam. Continental operates most of its flights from its hubs, with the exception of some notable routes (most notably Seattle-Anchorage and Los Angeles-Honolulu). Some airlines using the Continental Connection name also operate flights not involving hubs, such as Gulfstream International Airlines, which operates intra-Florida and Florida-Bahamas services. Continental has served Australia in the past with Douglas DC-10[13] and Boeing 747 service from Hawaii; Continental withdrew from much of the Australian market, leaving Boeing 737-800 services between Cairns and Guam. Continental also operated a large hub in Denver and closed the hub in 1995 shortly after Stapleton International Airport was replaced with the current Denver International Airport. Briefly during the mid-1990s, Continental operated a hub at Piedmont Triad International Airport (Greensboro, High Point and Winston-Salem), primarily as the base of its short-lived Continental Lite experiment. The airline dismantled the Greensboro-High Point-Winston Salem hub by 1995 following the termination of Continental Lite.[14] Continental was initially a domestic airline. It has served Mexican destinations for many years. During the Vietnam War, it began a presence in the Pacific region that formed the basis of the current Micronesian operation. Service to Japan was initiated in the 1970s from Guam and Saipan, and by the late 1980s, nonstop service between Seattle and Tokyo was briefly offered with 747 equipment, soon to be replaced with a direct Honolulu-Tokyo (Narita) flight. Through the 1990s, Continental maintained a minimal presence in the long-haul transpacific market, until the delivery of 777s in 1998 which saw the addition of nonstop Tokyo service from Houston and Newark. By 2007, Hong Kong and Beijing were added to the network, with Shanghai to follow in 2009, all from its Newark hub. It entered the transatlantic market in April, 1985, with the introduction of the Houston-London Gatwick flight. Long restricted from Heathrow due to the provisions of the Bermuda II agreement, Continental has focused its London operation on Gatwick, where in 2007 as many as six flights a day were offered to Newark, Houston, and Cleveland. In March 2008, a new Open Skies Agreement with the EU takes effect, effectively invalidating Bermuda II restrictions limiting the number of carriers and cities in the US that can serve Heathrow. In November 2007, Continental announced that new, nonstop, twice-daily service from its hubs at Houston-George Bush Intercontinental and Newark-Liberty to London-Heathrow will be offered beginning March 29, 2008. The services will replace select existing frequencies to Gatwick and will be offered with a combination of Boeing 777-200ER and 767-200 equipment culled from other flights around the network.[15] Continental flies to the most scheduled destinations of any US airline in India, Japan, Mexico, and the United Kingdom, and is the only US airline to fly to the Federated States of Micronesia, Indonesia, Marshall Islands, Norway and Palau. It has the most scheduled international destinations of any U.S.-based airline if Continental Express destinations are included. Continental began service from Newark to Mumbai, India on October 1, 2007 making it Continental's second Indian destination. On September 24, 2007 the Department of Transportation tentatively awarded Continental permission to begin daily direct service between Newark and Shanghai on March 25, 2009. The transpacific segment of the route is planned to be operated with a Boeing 777-200ER aircraft, while the flight will originate and terminate in Cleveland with a change of equipment at Newark.[16] Continental is considering routes from its hub in Houston to Dubai, Rome, Milan, and Madrid to start when it starts receiving 787s in 2009.[17]
FleetContinental's all-Boeing fleet with an average age of 8.9 years consists of the following aircraft:[2]
*First Class is offered on Domestic Flights. BusinessFirst is offered on Transatlantic/Transpacific Flights. Continental Airlines announced that it will acquire 24 more Boeing Next-Generation 737 aircraft, bringing the total number of Boeing 737NGs in its fleet to 213 when these aircraft, and pre-existing firm order 737NG aircraft, are delivered. On August 3, 2006, Continental converted an order for 12 Boeing 737NG's for an order for 737-900ERs, the first carrier in the Americas to operate the aircraft, with first delivery in 2008.[21] Continental Airlines was one of three carriers (with American Airlines and Delta Air Lines) to sign an exclusivity agreement with Boeing in the late 1990s. When Boeing acquired McDonnell Douglas, the European Union forced Boeing to void the contracts. Both parties have been adhering to the terms under a gentlemen's agreement. Continental was one of the first major airlines to fly the Boeing 757 on transatlantic routes. There have been some instances of range limitations on west-bound transatlantic flights due to strong headwinds resulting in a fuel stop which does not appear on the timetable, but these stops are not common. The use of the 757 with its smaller seating capacity has allowed for "thin" routes (routes with less passenger traffic) to be economically viable. It has allowed non-stop service from smaller cities, such as Bristol England, to the New York area. Previously, customers in Bristol had to go to London to cross the Atlantic. Former fleet
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