Arthur Burton established Astro Airlines in 1980, two years after the airlines were deregu-
lated. Burton’s vision for the new airline has two key elements. First, the airline would provide
low‐cost, no‐frills service to people who formerly could not afford to travel by air. Second, the
airline would have a novel type of organization that provided a better way for people to work
together, thereby unleashing their creativity and improving productivity. Burton was a dynamic,
emotionally stirring speaker with a kind of evangelical fervor, and he took advantage of every
opportunity to teach and affirm his vision. He was regarded by many employees as an inspira-
tional leader who made you believe that you could do anything. The climate at Astro Airlines in
the initial years was one of enthusiasm, excitement, and optimism.
Instead of the typical bureaucratic organization, the new company had only three levels of
management and few support staff. The emphasis was on equality, informality, participative lead-
ership, and self‐management. Employees were organized into teams with shared responsibility for determining how to do their work. The teams elected members to represent them in advi-
sory and coordinating councils that met with top management, thereby enabling them to par-
ticipate in making important decisions. Managers were expected to provide direction but not to
dictate methods or police efforts. Employees were expected to perform multiple jobs and to learn
new skills. Even the managers were expected to spend some time doing regular line jobs to keep
informed about problems and customer needs. The “status perks” found in most large organiza-
tions were eliminated. For example, executives answered their own telephones and typed their
own letters. New employees were carefully screened, because Burton sought to hire young, enthu-
siastic employees who were willing to learn new jobs and who could function as part of a coopera-
tive team. All permanent employees were required to share in the ownership of the company, and
they could purchase shares of stock at a reduced price.
Burton believed that a strategy of discount fares and convenient schedules with frequent
flights would attract new passengers who would normally travel by car, train, or bus, or who
would otherwise not travel. By keeping operating costs low, Astro Airlines was able to offer fares
that were much lower than those of competitors. The salaries of managers and employees were
lower than normal for the airline industry, although employees also received generous fringe
benefits, profit sharing, and stock dividends. Costs were also reduced by purchasing surplus air-
craft at bargain rates, by reconfiguring aircraft to carry more passengers (e.g., converting first
class into coach seats), and by innovative scheduling that allowed the planes to fly more hours
each day. Customers were charged for some frills such as meals and baggage handling that other
airlines included in the price of the ticket. To reduce space normally needed for ticket counters
at terminals, the ticketing for flights was done either in advance by travel agents or on the plane
itself with innovative ticketing machines.
The new company was an immediate success, and passenger volume expanded rapidly. In
less than three years the company grew from a few hundred employees with three planes to more
than 3,000 employees with 22 planes servicing 20 cities. This success occurred despite dismal conditions that caused widespread operating losses in the airline industry, including a severe eco-
nomic recession, a crippling national strike of air traffic controllers, and brutal price wars. The
flexibility of the company and the commitment and creativity of its employees aided its early
growth and facilitated rapid adaptation to crises such as the strike of air traffic controllers.
Copyright © 1993 by Gary Yukl
1. Describe Burton’s leadership behavior.
2. Was Burton a charismatic leader in the company at this time? Explain your answer.