The Civil Aviation Administration of China (CAAC) is on a mission to bolster the profitability of Chinese aviation, which has been in the red for well over a year. It's strategy? To create a new aviation model by incorporating best practices gleaned from western airlines into its own highly regulated system

It is an ambitious undertaking, but CAAC is uniquely positioned to make it happen since it owns the country's largest carriers and regulates the remainder. As a result, CAAC wields tremendous power to affect change in the industry. Recently, the agency has been using its power to launch a variety of initiatives aimed at modernizing Chinese aviation, including merging the nation's small regional carriers with the country's "big three" airlines; stepping up airport renovation and construction; and introducing airline managers to free-market management philosophies and tactics. To accomplish the latter, CAAC is drawing upon the expertise of one of the world's most experienced international carriers, United Airlines.

An alliance is formed

In 1999, CAAC knit together a unique alliance between United Services, a division of United Airlines, the City of Chicago Airport Authority and the Civil Aviation University of China (CAUC), which is the primary training ground for Chinese air traffic controllers, flight attendants, engineers and mechanics. The partnership, dubbed the American Management Exchange (AME), acquaints Chinese airline managers with free-market airline management practices through a series of three- to five-day workshops at the aviation university in Tianjin, followed by an on-site practical study for selected students at United's facilities in the United States.

"We are providing a window to how United Airlines applies its 75 years of experience in a variety of operational areas," says Jeff Leeds, manager of business support training for United Services. "We bring the students management concepts with the caveat: There's no one right way to do things. Our purpose here is to show you conceptually how we do things, why we do things, and then have you take these concepts and apply them at your airline. "

That's an important caveat since China's largest airline, Air China, operates about 100 planes, with most of the other Chinese carriers possessing fewer than two dozen aircraft. In contrast, United's fleet numbers more than 600, while its employee roll exceeds 100,000.

Despite these differences, both the Chinese students and United's facilitators manage to find common ground for discourse.

"We had a very productive two-way dialog in our seminar," says Joseph Murphy, a retired United Airlines' vice president and controller who led AMEs "Airline Financial Planning and Controls" course in June, 2000, "My students were keenly interested in hearing how United and other major airlines practice financial planning and control so that they could compare practices and get some different ideas that they might want to adopt, or not adopt."

Evidently, he's right. The 43 students, representing 10 airlines, two maintenance and repair organizations, CAAC and CAUC, gave the workshop an average of 4.5 points on a 5-point scale in course evaluations. The four other AME courses held to date garnered similar positive reviews from their combined attendance of nearly 200 students, representing approximately two dozen airlines and related organizations.

Leaping hurdles

The AME program is modeled after American-style executive training programs, with lecture interspersed with discussion, group role-playing, and collaborative activities. Its a start contrast with Chinese educational programs, which tend to be more formal, with little interactivity between teachers and students. As a result, United's instructors often find themselves introducing participants to a new type of classroom experience, as well as new ideas in airline management.

The language difference adds another dimension to the situation. Although the university furnishes translators and many of the students speak some English, classroom communication is rarely a seamless process.

During a workshop in December, 1999, for example, class instructor Dallas Mortensen, a retired director of quality assurance from United, quickly discovered that even a translator who is conversant in English may falter when faced with technical terms. Fortunately, some of the senior managers attending the quality assurance class volunteered to serve as de facto interpreters.

Nonetheless, some concepts remain inherently difficult to translate. Humor, for example, often doesnt cross the cultural divide very well, and many technical terms and jargon may not be translatable at all.

Of course, language is not the only obstacle United instructors have to overcome. Designing a meaningful curriculum is also a challenge. AME instructors often have to wrestle with issues such as how to convey free-market concepts to those enmeshed in a regulated economic system or whether to adapt course content based on Chinese cultural mores.

For example, a core value of United's human resources protocol is assertive communication. Yet, the whole idea of questioning your supervisor, a captain, or other authority figure is considered unacceptable behavior by many Chinese. However, assertiveness has been so critical in Uniteds success in reducing human error, that Leeds kept it the syllabus for the course he taught on human factors in maintenance.

"Students understood the concept," says Leeds, "but, quite honestly, Im not sure how it will go back into the workplace."

Internships reinforce workshop lessons

To help participants envision how classroom concepts can be applied in the workplace, United provides a number of post-workshop "internships" at its American facilities. During these internships, selected students have the opportunity to observe various aspects of United's operations firsthand.

"Students are amazed when we bring them to our maintenance base in San Francisco, and they see that staff folks here are not directed, but manage themselves by objective," says Leeds. "They're not used to that. It's a big cultural difference."

To qualify for the week-long study trip, which is underwritten by United Airlines, class participants must complete an essay on how they intend to implement concepts they have learned in the workshop. Eight to 10 students are selected based on the essays and on their English skills.

"It is a very good model," says participant Li Xiaoguang, chief engineer of China Northern, following the AME quality assurance session in 1999.

However, it remains to be seen just how the AME program will ultimately impact Chinese airlines. Although the participating managers are very open to new ideas, these students realize it will take time and patience to affect substantial change in their workplaces.

A student from the airport management seminar held in December 2000, for example, points that while deregulation, "hub" airports, and scale operations could benefit Chinese aviation, "currently all these are too far a reach for Chinese airports." However, he did come away from the course with several operational tactics that he says could yield "instant results" for Chinese airports and help them expand revenues over time.

Participants from other workshops also have discovered specific tactics they can put into immediate practice. Chen Yizhong, a manager at Xiamen Airlines who attended the AME workshop of quality assurance, returned to his job with plans to emulate Uniteds quality assurance procedures and revise his company's QA manual.

Building relationships

Chinese mangers arent the only ones who leave AMEs workshops with new ideas.

"I came away with a much deeper understanding of the Chinese airline industry and the major issues that are present," says AME instructor Murphy. "Sharing information and insights about airline management philosophy and practices is an excellent way to build long-term relationships with valued partners in other countries around the globe."

In a dynamic, high-growth economy like that of China, these relationships are particularly critical for United, which hopes to expand its commercial and strategic initiatives throughout the region. Currently, United Services provides several Chinese airlines with a broad range of support services, including maintenance, engine overhauls, flight training and ground handling.

"The American Management Exchange should prove to be a worthwhile investment for United Services," says Leeds. "By giving something back to a country that has already been the source of considerable business for United, we are creating stronger ties between our two countries, and that will ultimately benefit us all."

In fact, the AME workshop/internship program has been so popular that United Services has considered developing similar programs to other countries and airlines. With its extensive resources and worldwide operating experience, United's management team feels it is uniquely qualified to assist airlines seeking to improve their management, maintenance and safety practices.

 

SIDEBAR:

In The Classroom

When Jeff Leeds, manager of business support training for United Services, stepped into the very traditional classroom at the Civil Aviation University of China last March, his first thought was, "This just won't do at all."

Leeds, who had come in Tianjin to conduct a three-day AME class on human factors in airplane maintenance, immediately rearranged the rows of desks into eight "pods." As the students drifted in, they appeared taken aback and began clustering together by airline. Leeds was having none of that. He quickly shuffled them to different pods and set them to work. His opening gambit? Bid each group of students to work as a team to build a model that runs, and is safe, reliable, and inexpensive.

"The Chinese students are highly task oriented," says Leeds. "You really dont have to facilitate the activities as heavily as you do in most American classrooms."

On the other hand, the Chinese do not share their opinions as readily as many of their American counterparts. For example, when Leeds tried to spur classroom discussion by tossing out questions for the class, every query, even the controversial ones, bombed. Nobody was willing to volunteer information. To elicit a response, Leeds had to direct his questions to specific students.

"One of the greatest cultural differences I encountered," says Leeds, "and one thats a bit frustrating for me as an educator, is that we want to teach them concepts, but they want a very detailed step-by-step cookbook with recipes on how to do things. They want an incredible amount of detail. Were not used to teaching that way."

Nevertheless, at the end of the day, several of the young executives sought out Leeds, telling him that they had never had an educational experience like that.

"They enjoyed it," he adds, "It was difficult, but they enjoyed it."