Play Hard, Fly Right

Although Bethune has worked hard to manage employee expectations, airline analyst Sam Buttrick of UBS Warburg thinks he could face tough demands in already delayed contract negotiations with the machinists and with the pilots next October. Continental has been profitable in large part, says Buttrick, because of its lower labor costs — not just lower wages but also less generous pension benefits and looser work rules.

Bethune specializes in squeezing out small cost cuts even while forging ahead with building projects like the $1.4 billion renovation of its hub at Newark airport, which has helped make Continental the New York City area's largest passenger carrier. Bethune also invests heavily in technology, putting mechanics' manuals online and pushing e-tickets, which account for 72% of domestic sales.

Continental's stock, like that of most airline carriers, took a huge hit after 9/11. Since those lows, Continental's shares have somewhat recovered — and are now up 16%, faring much better than United's but not as well as Southwest's, which are up 31%. Over the past three years, Continental's stock has outperformed United's and U.S. Airways' but has lagged behind Southwest's and American's. Industry analysts, like Holly Hegeman, editor of PlaneBusiness.com, consider Bethune more shareholder friendly than most airline ceos. But he tarnished his reputation somewhat in late 2000 when he paid $450 million — far above market value — to buy out Northwest's stake in Continental and give himself greater power to run the airline.

Bethune in April spun off ExpressJet, the then wholly owned subsidiary that operates Continental Express, the nation's No. 2 feeder airline. The IPO delivered an estimated $300 million to Continental — which still retains a majority stake. But unlike JetBlue, whose stock soared 67% the first day it traded, ExpressJet has stalled below its opening price of $16, irking Bethune no end. "I don't think JetBlue has a better chance of being profitable than 100 other predecessors with new airplanes, new employees, low fares, all touchy-feely," he says. "All of 'em are losers. Most of these guys are all smoking ragweed."

Bethune also has harsh words for some of his competitors among the major carriers. "Some guys in our business are always looking for the autopilot. There isn't one," says Bethune as the plane touches down in Houston. "Success doesn't have an autopilot. You need to work every day." Though it's late on a Friday afternoon, everyone heads back to the office, led by Bethune, alone in his Porsche, speeding off like a crazy man.