The tale of Continental Airlines is that of ups sand downs. The company faced two bankruptcies in its seven-decade-old history. And, despite its successful recoveries from the state of bankruptcy, first in 1983 and then in 1990, the company's performance is yet to be consistent. Post 9/11 attacks saw Continental recording two successive years of losses and is yet to return to profit-making ways.
No
airlines company in its history would have faced so
many ups and downs as the US-based Continental Airlines,
the world's fifth largest airlines. The company in its
70 years of history (it was founded in 1934 as Varney
Speed Lin) went bankrupt twice! And, though, it managed
to pull back successfully on both the occasions, the
airlines is once again facing tough prospects as it
reported second successive losses in the last two years
ending December 31, 2002. And, even during the current
year the company's performance for the half year ending
June 30, 2003, it is unable to make profits although
it has been able to cut losses; the airlines has reported
a net loss of $142 mn, though it is less than half the
loss of $305 mn incurred during the same period last
fiscal year.
The
company went bankrupt first in 1983, from which it recovered
in 1986. However, financial trouble surfaced once again
in 1990. As a result of the Gulf War in 1990, oil prices
touched sky high and unable to cope with the rising
fuel costs the company had to again file for bankruptcy
protection for a second time in its history. And, by
1994, the airlines' troubles touched their nadir as
both its financial condition as well as its reputation
hit new lows. Employee morale was down to such an extent
that they did not even want to carry the tag of being
a Continental employee with them. What's more, the company
ranked last in federal rankings for on-time performance,
luggage handling, and the involuntary bumping of passengers
off flights. In fact, said the then CFO, who later was
instrumental in the rescue act, that the airlines company
occupied all the fields in the bad performance category.
Employees were disgruntled about their work environment
and their wages. They had to even take pay-cut after
pay-cut so as to keep the airlines stay afloat. Also,
customers were not happy with the airlines' service;
Continental was considered the worst among the nation's
ten biggest airlines. |
