Gordon Bethune, Chmn. & CEO of Continental Airlines

This is a partial transcript from Your World with Neil Cavuto, March 27, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Airline executives also keeping a very close eye on war developments. The timing couldn't be worse from many of them as the industry battles the biggest financial crisis in aviation history. Who better to talk to than the guy right in the middle of it all, Gordon Bethune. He's the chairman and CEO of Continental Airlines. He joins us now for an exclusive interview.

Gordon, good to see you.


CAVUTO: Tough times for you guys, huh?

BETHUNE: Yeah. I have never seen it this tough before. It is as bad as I think it's ever been.

CAVUTO: International bookings, we are told, are down appreciably. Domestic bookings are down. Spell it out.

BETHUNE: Well, 20 percent domestically, 40 percent internationally, there is just, fear, anxiety. And we had already had a 60-day kind of warm-up with bookings being soft and especially into Europe, during March, fuel...

CAVUTO: Because people knew this was coming up, right?

BETHUNE: Right. They kind of planned on the war, watch at home on TV. And at the same time, fuel pressure from the bottom really tipped, and the expense is heavy, so it's been a big squeeze.

CAVUTO: You know, many of your brethren in the industry are saying we need help, Uncle Sam, billions of dollars worth of help. Do you?

BETHUNE: Well, I think what we need is to leave us alone. We don't need grants. We certainly don't need any more loans. We're kind of fully pledged. But we really need to keep money that we a earn. So on $200 ticket, Neil, we give the government like $52 of it. We need to keep that money. The government has got a tax rate on it.

CAVUTO: So what, excise fees and taxes, you guys are getting.

BETHUNE: Yeah, security fees. For the last 10 years it's up 78 percent. I think it's up since deregulation 250 percent.

CAVUTO: But you know, some of your colleagues, Gordon, are saying that they do need more grants. They do need more bailouts, for want of a better word.

BETHUNE: I think we need to evolve as we have in the past with the Braniffs, and the TWAs. So if you can't sell the $200 ticket, you probably need to disappear. But if you do sell a $200 ticket, you ought to be able to keep the money.

CAVUTO: But you're not beyond feeling the pain yourself, right? You had to layoff what, about 1900 workers?

BETHUNE: That's because we've got to survive, Neil. We are the first out of the box here. But we are going to do the things - we took 400 million out of company last year. We're going to take another 500 out. And we are doing the things we can do. But at the same time I think the government needs to look at this tax policy, you probably have got the wagon overloaded.

CAVUTO: Let me ask you a little bit as we looked at scenes in Baghdad today, people fear that the more they see this type of activity the more there is going to be - or the likelihood will be, of a tit-for-tat in the United States, or on a U.S. carrier. What do you think about that?

BETHUNE: No. I can't envision that. This is a small country. We are a very large country. We've got great security. I think that is probably a latent fear people might have. But we are getting on with our lives. Already this week is getting to be a little bit better than it was five days ago.

CAVUTO: Is there a sense though that if this passes quickly, and that is debatable, things return to normal or will people be forever scarred thinking, well, it's just a matter of time before the other shoe drops?

BETHUNE: Well, I'm not sure about that. I think people get on with lives as we have done with the Cold War and a whole bunch other crises that have faced us in the past. But at the same time we have learned from this. And I think we will never go back to where it was pre-9/11.

CAVUTO: Different matter, the president didn't get all he wanted out of his tax cut. They've already halved it. Talk about further stimulus coming out of Washington seems to be fairly limited now, you going to worry?

BETHUNE: Well, I think the guy has got good judgment. And he is an honest man, so that is all you can ask for in a leader. I think, you know, things will work out one way or another. The tax cut would have been better full, but that is not my call. I'm trying to run a small company here in the States. Keep our nose above water.

CAVUTO: Well, with all this smoke and fire we see in Baghdad, oil prices back up over $30 dollars a barrel, there was a "Washington Post" story, I'm sure you are aware, that says this could go on for months, and everyone is hanging crepe, what do you think?

BETHUNE: Well, I am looking at the oil, as I understand the situation, being fairly secure. So ultimately the fear of war and the price of oil will go away. And I hope to get the oil back below 30 where it belongs, closer to 20.

CAVUTO: That's the biggest chunk of your cost, isn't it?

BETHUNE: Well, it's a squeeze, yet, the increased costs from bottom and the drop revenue from top, and you know, it's just the thin meat in sandwich here.

CAVUTO: Yeah. All right. Gordon, best of luck to you, appreciate it.

BETHUNE: Always.

CAVUTO: Gordon Bethune, the man who runs Continental Airlines.

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