This is a partial transcript from Your World with Neil Cavuto, October 31, 2001.

NEIL CAVUTO, HOST: Before September 11th, Continental Airlines was one of the few major U.S. airlines in this country — pretty much anywhere — posting a profit. Now, the airline industry is hurting big time and is expected to report as much as $5 billion in losses.

So how is Continental doing? In the latest period, earnings down 98 percent, still making money, but darn close to not making money.

Gordon Bethune now is the chairman and CEO of Continental Airlines, joins us from company headquarters in Houston, Texas.

Gordon, good to have you back.


CAVUTO: Interesting earnings report here. Had you got gotten that money, the airport rescue recovery package, whatever you want to call it, you'd have been under water, right?

BETHUNE: Oh, absolutely. There's no question about it. It was a timely assistance, and people like Tom DeLay stood up for us and did the right thing. We kind of got back to where we were. We were expecting a very modest profit in the third quarter. The government money offset the extraordinary loss and we're right back to where we thought we'd be.

CAVUTO: You know, it's interesting. Since the attack itself, your stock has tried to rebound, but a lot of people are surprised the airline industry has not rebounded more. What do you make of that?

BETHUNE: Well, we already were going into a kind of a recessionary period, and you can see business travel was off prior to 9-11. Of course, that exacerbated it tremendously, and all the international is still a lot below. But we've got the domestic load factor, Neil, slightly above what it was year over year. That's because we have cheaper fares, but people are coming back on the planes.

CAVUTO: Are you surprised, though, that as we take a look at how some of your industry brethren have been doing, at least on Wall Street, that the Street seems to express little confidence that you'll turn around any time soon? What do you make of that?

BETHUNE: It's the great unknown or what's going to happen next. You're right: There are a lot of structural problems in our business today, but you know, I feel more confident today than I did certainly six weeks ago.

CAVUTO: Let me ask you about this airline rescue package. You know, there are a lot of other folks now going hat in hand to the government, saying do for us what you did for them. Do you think you got preferential treatment?

BETHUNE: Well, Neil, you know, there was an airplane in the side of the World Trade Center and those were passengers. We were directly involved, and of course, the government actually told us to stop operating for a time. So I'm not sure it's preferential. We certainly were involuntarily engaged in this dilemma, and I'm not sure everyone was to that extent.

CAVUTO: Still, a lot of hotels, as you know, Gordon, stopped doing business. I mean, they stopped filling rooms. They're saying, well, even if you don't do something to the degree for us what you did for them, do something. What do you say?

BETHUNE: Well, I don't know. I do know that if we don't get transportation working in this country, everything stops. And of course, you know, down here at the M.D. Anderson Cancer Treatment Center, nobody came here for four days. So the whole world kind of came to a stop. We need a transportation system to have an economy, and I think the government responded to that element: not so much who's hurting and who's not hurting.

CAVUTO: Do you think the government should take over airport security?

BETHUNE: Well, I believe that there ought to be federal standards in our airports, and it ought to be uniformly applied through all the airports in America. And I think it's time for the federal — this is a public safety issue, Neil. It's not just about passenger safety, which was the old airline security. The people in the Trade Center and the Pentagon were not passengers. And so our government is responsible for the public safety, and it ought to take charge.

CAVUTO: So just the government. You know, you might have heard your friend, Tom DeLay, saying, well, a quasi-public-private institution akin to what they do in a lot of European countries might be more the route to go.

BETHUNE: I think he's spot-on. Tom is kind of a stand-up guy, and he's exactly right on that issue. But it does need to have that federal imprimatur on it and jurisdiction. And you've got to have somebody looking at you, not just looking in your bag. But...

CAVUTO: Yeah. But you know what I'm worried about, Gordon? You get a minimum-wage worker with an attitude either in the private sector or a minimum-wage worker with an attitude in the public sector. So you really don't gain.

BETHUNE: I don think you're going to get a minimum wage. To the extent that you have to be an arms-carrying, kind of licensed person with some training, you're going to want to keep that person. You're going to have to pay them, because you can't afford the turnover that minimum wage gives you. So I think it'll be a very good, lucrative job, but it'll be performance-based: not just a right as a federal employee.

CAVUTO: Gordon Bethune, Continental Airlines chairman, thank you, sir.

BETHUNE: Thanks, Neil.

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