Ousted Pan Am Official Jumps to Continental

Martin R. Shugrue Jr., who was ousted as vice chairman of Pan Am Corp. on Jan. 20, has been elected president of Continental Airlines.

Shugrue, who had started his 19-year-long career with Pan Am as a pilot/flight engineer on a Boeing 707, lost his job in a personnel reshuffling at the financially ailing carrier. C. Edward Acker, who was Pan Am chairman, and a number of other key executives also were fired. The shake-up had been inspired by Pan Am’s unions.

Shugrue, 47, said in an interview that he was “excited” about “joining the Continental team and continuing the progress that I think that Continental has made over the last couple of years.” He said there was a “unique opportunity to develop a relationship among managers and employees that is solely dedicated to providing the best value for the consumer dollar that can be found in the airline industry.”

Shugrue succeeds Thomas G. Plaskett, who had been president of Continental from October, 1986, until last July when he was fired by Francisco Lorenzo, chairman and chief executive of Continental. Since Plaskett’s departure, Lorenzo has been serving as president.

Shugrue labeled as an “unfortunate coincidence” that he was moving into Plaskett’s old job and that Plaskett had stepped into the top post at Pan Am.

Shugrue said Tuesday that the shake-up last month was not a factor in his moving to Houston-based Continental. He said he had a “serious dialogue” with Lorenzo “well before the beginning of the year.” But, he added, that “I didn’t make a final judgment until a relatively short time ago.”

In making the announcement of the appointment, Lorenzo praised Shugrue and said: “Marty brings to Continental a strong and varied background, with extensive hands-on experience in personnel, customer services, marketing and administration.”

Observers agreed that Shugrue can make an important contribution at Continental, which has been beset by problems of shoddy service, unreliable maintenance and an inferior overall product delivered to the passenger. In particular, Continental has had major problems ingesting People’s Express, which it took over exactly a year ago.

“Shugrue has a very strong operating background,” said Timothy Pettee, airline analyst with the New York brokerage house of Bear, Stearns & Co. “Continental needs some operating disciplines right now. I look for Shugrue to make some significant contributions towards ironing out some of the persistent problems at Continental.” Shugrue moved up the ranks at Pan Am, holding a series of positions until he was appointed vice chairman in 1984. He became chief operating officer in 1985.

Before joining Pan Am he served for six years as a carrier-based U.S. Navy pilot.