1) What was the Go Forward Plan all about in Continental Airlines in the midst of its

nosedive for the third time?

The Go Forward Plan identified additional actionable ways the company could
move from first to favorite. Technology became increasingly critical for supporting the
plans initiatives. At first, having access to historical, integrated information was sufficient
to support the Go Forward Plan and to generate considerable strategic value for the
company. However, as Continental moved ahead with the First to Favorite strategy, it
became increasingly important for the data warehouse to provide real-time, actionable
information to support enterprise-wide tactical decision-making and business processes.
Most employees were supportive of the plan, and those who werent, left the company.
Under Bethunes leadership, the Go Forward Plan, and a re-energized workforce,
Continental made rapid strides. Within two years, it moved from worst to first in many
airline performance metrics, including on-time performance, lost baggage claims, and
customer satisfaction.
It has four interrelated parts that had to be executed simultaneously:
Fly to Win Continental Airlines committed to stop doing things that dont make money.
Losses had to be replaced with profits if the airline were to survive. This required multiple
actions such as: non-profitable routes had to be dropped; continental would fly only to
places where people wanted to go and were willing to pay a fair price; relationships with
travel agents had to be restored. In its efforts to cut costs, Continental cut agents
commissions, gutted its frequent flyer program, and took away incentives that agents
could use as selling tools (e.g., upgrades). Relationships with customers had to be
improved, especially with high-value business travellers. Any costs that did not create
value for the customer were cut to better understand what products customers wanted
and were willing to pay for.
Fund the Future - It needed to change its costs and cash flow so that the airline could
continue to operate. Continental was quickly running out of money. Loans were
renegotiated to stretch over a longer time period. The company was able to get out
from under leases for planes that were unprofitable to fly. Boeing agreed to partially
refund the down payment for planes that were not needed. Costs were cut wherever
possible, such as closing down the Los Angeles maintenance facility. The CFO personally

signed every large check. A significant investment was made to improve the financial
reporting systems so that there was reliable information.
Make Reliability a Reality - It had to be an airline that got its customers to their
destinations safely, on-time, and with their luggage. Continental had to get back to
what people expected of an airline. The only way to do this was to motivate employees.
Following the dictum, what you measure and reward is what you get, Continental
implemented a measurement and reward system that provided incentives for
employees to make Continental a more reliable airline. It also did away with an
employee manual that was so restrictive that it sometimes eliminated the employees
ability to do what was most logical. An 800 number with an operational response team
on the other end was set up to respond to problems in the field. When customers had
problems and complained about service, Continental quickly responded, apologized,
and took appropriate steps to correct the problem.
Working Together - Continental needed to create a culture where people wanted to
come to work. Continental needed to treat its people better and get them working
together as a team. People should want to come to work and be proud of their
employer. In meetings and through other communications, employees were told the
importance of teamwork and treating one another with dignity and respect. A 360degree review process was put in place to measure how well managers communicated
and encouraged their teams. Employees were trusted to use their judgment and to
make the right decisions. If they did not buy into this new culture, they were let go.
2) Continental was on its way to bankruptcy for the third time and would not be able to
make the payroll for January 17, 1995 payday. How did Gregg Brenneman and Gordon
Bethune manage the crisis?
On Thanksgiving Day, 1994, Greg Brennenman found out that Continental Airlines
wouldnt have enough cash to meet their employees payroll on Jan. 17, 1995. This came
as a surprise to Brennenman since in the past years, the finance department has been
inflating CAs profit and making overoptimistic revenue estimates. He then informed
Gordon about this problem and they decided to arrange a meeting with their creditors
to convince them to permit CA to restructure their obligations.

In their meeting, Brennenman informed the creditors of the problem CAs facing
and laid to them the plans they had to fix it. At first, the creditors didnt agree with
Brennenman and began ranting. But after sometime and after a heated conversation
between them, they were able to convince their creditors. With the help of financial
experts, Brennenman was able to make a plan on how to restructure their debt. They
were able to provide their employees salaries on January 17, also with the help of a $29
M wire transfer from Gordon.
3) Continental Airlines painted a dear picture of a corporate turnaround. How did Gregg
Brenneman and Gordon Bethune arrest the plummeting business of Continental Air?
To put an end to Continental's strategic wandering, Gregg and Gordon introduced the
Go Forward Plan to coworkers. Fly to Win was the marketplace plan, Fund the future was the
financial plan, Make Reliability a Reality was the formula to improve the product, and Working
together was the blueprint for improving the company's culture. One of their technique was to
find people who were in number two position and ask them to join Continental in the number
one spot. They decided to clean house Continental when they took over. They went through the
entire organization from the highest supervisors to the bahage handlers.

4) Would you agree to cost cutting measures as one best way to reverse the adverse
situation of cash-strapped organization?
I would not agree that it is the one best way to reverse an adverse situation because
simply cutting costs will not quickly solve a problem. An adverse situation can be solved in many
ways depending on their situation, so I think there is no one best way because if there is then
managers wont have any problems at all. For me, cost cutting is a double-edged sword. If used
correctly, it can solve problems or help the company gain higher profit. If is mishandled, it can
make the company bleed. Cost cutting will help the company remove cost increasing products
or facilities that doesnt give the company a lot of value. Continental airlines removed some of
their facilities and managers that werent important which allowed them to save money. Cost
cutting may make the company bleed by reducing its product or service quality. Continental
Airlines had poor service because of cost-cutting which was one of the reasons that put them in
an adverse situation.

5) What was the significance of the seat 9-C in the Continental Airlines turnaround?
Seat 9C customers are those full fare business customers that are critical to an
airlines success. Brenneman was careful to differentiate between what the customers
wanted against what they were willing to pay for customers can want you to
bankruptcy if youre not careful. To win these customers back, Continental launched a
massive effort to regenerate airplanes inside and out, remodel their terminals, and
upgrade food service, all in six months rather than the four years originally estimated.
These changes addressed a major concern of the customers most important to the
airlines success. And the upgrades built positive momentum for further change.
With these changes, he immediately brought back his most highly profitable customers.