Rumors Fly as Continental Airlines Chief Quits

Thomas G. Plaskett resigned Tuesday as president and chief executive of Continental Airlines amid conflicting reports concerning the reason for his departure. He was succeeded in both jobs by Frank Lorenzo, head of Continental’s parent company.

Plaskett had been in the Continental posts for less than nine months, having been appointed to them on Nov. 1. Before that, he spent 12 years with American Airlines in high-level jobs and is widely respected in the industry.

However, one source close to Houston-based Continental said Plaskett had been fired. But other observers speculated that the 43-year-old executive had resigned because he is in line to fill a vacancy as head of United Airlines, a subsidiary of Allegis Corp.

Lorenzo added Plaskett’s jobs at Continental to his present titles of president and chairman of Texas Air, the holding company that owns both Continental and Eastern Airlines.

The source close to Continental, who asked not to be further identified, said: “The board requested Plaskett’s resignation. There was a belief that the airline needs a strong hand and direct management control of the company. The board asked Lorenzo to resume that role on a permanent basis.” Lorenzo had headed Continental before Plaskett’s appointment.

The source said, “It was never any one single thing” that was held against Plaskett. “The board looked at the results of the past few months and also looked toward the future.”

On Monday, Texas Air reported a $27-million loss in its second quarter. The losses were said to be largely the result of problems encountered in integrating People Express airline into Continental after its acquisition by Texas Air last December.

The Continental subsidiary’s loss widened in the second quarter to $71.1 million from $56.8 million in the same period a year ago. The 1986 period included a $58.2-million charge for costs in connection with Continental’s emergence from bankruptcy.

Also, Continental has had persistent problems with complaints by passengers about its service. Many are sending formal complaints to the Department of Transportation.

Timothy Pettee, airline analyst with the New York stock brokerage of Bear Stearns, said the departure of Plaskett from Continental came as a surprise.

“Clearly, the Continental (quarterly financial) results were below par,” he said. “But they were not suggestive that a major management shift was necessary. When Plaskett joined the airline, he was given a great deal of credit for his strong management abilities and varied experience.”

But Pettee said Plaskett might be in line for the job at United. “I would put some credence in that report. I would not be surprised if that is why he left.”

Plaskett could not be reached for comment Tuesday, and spokesmen for United declined to comment.

Before joining Continental, Plaskett had been senior vice president for marketing of American Airlines and senior vice president of AMR Corp., its parent company.