This is a partial transcript from Your World with Neil Cavuto, May 27, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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BRENDA BUTTNER, GUEST HOST: Last summer at this time, Continental Airlines (CAL) was flying high, and its stock soaring even higher. Then came September 11. Within days, the stock tanking nearly 70 percent, as anything airline was grounded on the tarmac and on the Street.
Continental's clawed its way back. And it's a heck of a lot better off than its competitors. But in case you think Continental Chairman Gordon Bethune is crowing, think again. He's worried. And he joins us now. Mr. Bethune, welcome.
GORDON BETHUNE, CHAIRMAN & CEO, CONTINENTAL AIRLINES: Hello.
BUTTNER: So you are still feeling the pain, then, post-9/11?
BETHUNE: Well, I think the whole economy has been. Certainly the airline industry was most impacted, and we are still struggling to get on our feet financially.
BUTTNER: Are you thinking about fare increases?
BETHUNE: We're thinking about it but that's all we are doing, I'll tell you. We need one obviously. We did some heavy discounting to get the behavior back, get people back on the airplanes. But there is still way too many seats chasing too few passengers, so there's a lot of discounting out there. We need ultimately to raise the fares.
BUTTNER: You did try a fare increase a little bit earlier and it just failed, yes?
BETHUNE: Well, in that is, again, we are as good as our dumbest competitor in this business. So, until there is a consensus that all of us can afford to raise fares, none of us will.
BUTTNER: So you don't think we'll see fare increases this summer?
BETHUNE: Well, I can't predict that. I would hope so, as obviously because we led one. But there needs to be one. Summer is always traditional more demand, so quite possibly, we will be able to do less discounting in the summer than we have in the past.
BUTTNER: You know, a lot of Americans look at the airlines and say we just gave them a multi-billion dollar bailout. Why can't they get on their feet?
BETHUNE: Well, actually, they restored some losses that we had through September 11, through December 31 is what actually was given to the airlines. In Continental's case, 400 million.
We lost significantly more than that and we continue to lose that. So it is not a question of people giving you money. It is restoring money for what was lost when the government stopped us from flying. And I think, you know, we need to get on our feet financially because the marketplace has collapsed, not because the airlines are doing anything wrong.
BUTTNER: Do you think you are going to have to apply for loan guarantees? Some of your competitors are.
BETHUNE: Some of the competitors are, but in Continental's case, we were able to raise $850 million in the private equity markets and debt markets. So I think we are adequately, you know, have the liquidity to get through this. We don't anticipate a loan for Continental.
BUTTNER: And there has been a push in Congress to double the security fees. So you are getting hit by higher oil prices plus higher security fees. How much would that hurt you?
BETHUNE: Well, that would really hurt the consumer. That would take the average tickets price up another, you know, a total of $20 for security fees, which is a ludicrous amount. And, obviously, it's a national public safety issue. It's not a passenger safety issue. So whatever security fees need to be added to do whatever security needs to be done should be a general public thing, not certainly the airline passenger who is paying way, way too much today.
BUTTNER: How safe is flying on Continental?
BETHUNE: It's as safe as you could possibly want it to be. I don't know of anything that we can do to enhance it. It is still the best, safest way to travel anywhere in the world, and the United States still enjoys that reputation.
BUTTNER: Do you think your pilots need to have guns on board?
BETHUNE: I think that is debatable. What I would like to see is people kind of slow down, adding new security measures until we have a better sense of all the things we have done. We are still implementing, you know, further restraints on cockpit doors and other procedures. So, I think maybe a time-out and see where we are before we add that issue to the agenda.
BUTTNER: Do you understand, though, why Americans are afraid of flying? They are actually going to be more Americans traveling this summer, but it looks like fewer flying.
BETHUNE: Well, there is still a half a factor, especially for the shorter haul trips, in not worrying about, you know, getting through security and all the extra process time. Certainly for longer trips, air transportation will always be the fastest.
But, I think, you know, people are coming back and getting back to normal. It's a fairly resilient public we have and I'm glad to see them getting back to normal just like years ago.
BUTTNER: Well, you have a strong history of bringing airlines back to normal. When you do expect to actually be profitable? Shareholders are sure looking at that one.
BETHUNE: Well, I'd like to be able to predict accurately. It looks like next year would be the earliest that we could predict that. It is all tied to the general economy, Brenda, and we need a strong economy for us to be profitable as an industry. I think Continental will be first amongst the major trunk carriers, but I can't really tell you when. I would like it to be now, frankly.
BUTTNER: Well, we wish you the best of luck. Thank you so much.
BETHUNE: Thanks so much. All right, bye-bye.
BUTTNER: CEO of Continental Airlines, Gordon Bethune.
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