Bloomberg Businessweek - USA (2019-10-07)

 BUSINESS

19

BASTIAN: CHRISTOPHER GOODNEY/BLOOMBERG. ILLUSTRATION BY ROSE WONG FOR BLOOMBERG

BUSINESSWEEK.

DATA:

U.S.

DEPARTMENT

OF

HOMELAND

SECURITY

THE BOTTOM LINE Chinese account for a third of foreign

students in the U.S. Tensions between the two nations are causing

applicants to consider schools in the U.K., Canada, and Australia.

explanation, ASU President Michael Crow said in a

Sept. 19 statement.

With China’s education ministry in June warning

students in the U.S. to be vigilant because of greater

restrictions, more Chinese want to find alternatives

to the U.S., says Sun Yiding, CEO of Beijing-based

RISE Education Cayman Ltd., which organizes study

abroad tours. This year the numbers for RISE’s U.K.

tours “increased significantly,” Sun says.

Other countries are trying to become more wel-

coming. British Prime Minister Boris Johnson’s gov-

ernment in September announced it would soon

allow foreign students who study in the U.K. to

work there for two years after graduation, reversing

a policy from 2012 that had forced those students

to leave the country within four months of com-

pleting their studies. Canada in February unveiled

a policy that would make it easier for foreign grad-

uates of Canadian schools to receive work permits.

And in Australia, the government gave work visas

to 64,000 foreign graduates for the year ended in

June, almost triple the figure for 2014.

“This is a very competitive market, and as U.S.-

China relations take on a negative tinge, our friends

in Australia and the U.K. are perfectly willing to

take on Chinese students,” says Ted Mitchell, pres-

ident of the American Council on Education, which

represents 1,700 colleges and universities.

Bright Scholar began its shopping last year with

the purchase of Bournemouth Collegiate School

in Dorset, England, for an undisclosed sum. It fol-

lowed up in June, buying two more British schools

for a total £38 million ($47 million), and a month

later announced the acquisition of 18 schools in the

U.K., Canada, and the U.S. for £150 million.

Still, Chinese companies aren’t giving up on

the U.S. market. Among the schools acquired by

Bright Scholar is a private high school on more

than 20 acres in Braintree, Mass. In nearby Boston,

Beijing-based Ambow Education Holding Ltd. owns

Bay State College, a for-profit institution it acquired

in 2017 as a destination for some of its students

from China who want U.S. degrees. Ambow also

expects this year to purchase another for-profit col-

lege, New School of Architecture and Design in San

Diego, according to CEO Jin Huang.

Even with the chill in bilateral relations, Huang

says, the appeal of an American degree will remain

strong. “After studying in the U.S., they have a better

chance to find a better job compared to other coun-

tries,” she says. —Bruce Einhorn and Jinshan Hong,

with Angus Whitley

BWTalks EdBastian

Delta Air Lines led all U.S. carriers in net

income last year, and CEO Bastian is intent

on expanding its global reach. On Sept. 26,

Delta agreed to pay $1.9 billion for 20%

of Latam Airlines Group, Latin America’s

largest. —Carol Massar and Jason Kelly

○ Became CEO of Delta Air Lines Inc. in 2016 ○ A CPA, he held finance

jobs at PricewaterhouseCoopers and PepsiCo Inc. before joining Delta in

1998. He briefly left in 2005 before being wooed back to help manage Delta’s
      bankruptcy ○ Has bought minority stakes in Korean Air and Air France-KLM

○ Interviews are edited for clarity and length. Listen to Bloomberg Businessweek With

Carol Massar and Jason Kelly, weekdays from 2 p.m. to 5 p.m. ET on Bloomberg Radio.

What’s one thing that excites you,

looking ahead five or 10 years?

International. We’re a great

U.S. airline now. I want to be

a great international airline.

As the investments in our

international partners take

root ... I think we have the

opportunity to be that.

What’s Delta’s take on airline

partnerships and code-sharing and

frequent-flyer alliances?

One of the things that’s

not been successful in

the airline world are the

alliances, and I’m being

self-critical. [Delta leads

the SkyTeam alliance.] So

we’re going at this in a very

different approach, through

Delta making bilateral

investments in the most

important partners. They

want to know what Delta

has learned about operating

efficiency and prowess and

premium [service]. And

we want to learn what it

takes to win in those local

markets. Over time, while

we can’t own them, we can

have meaningful enough

investment that we create

an international network of

carriers that will be uniquely

tied, with Delta as the

centerpiece. That’s our goal.

You’ve won plaudits from customers.

What’s the story for investors?

While the airlines may have

performed [well] at certain

periods of time, they also

spent back what they

made on labor, technology,

capital, and fleet. We’re

doing that but also returning

a meaningful amount [to

investors]. So this year at

Delta we expect to make

over $5 billion for the fifth

year in a row in terms of

profits. But we’ll also have

free cash flow to liberate

this year of over $4 billion.

I think that performance

and that consistency is

rewarding.

How have your customers benefited?

Consumers are getting great

value. Airfares at Delta are

down 40% in real dollars

over the last 20 years. It’s

remarkable—and another

reason travel’s booming.