A Study Of The Value-Added Management Of CSA's Cashflow

One of the vital resources essential to business operation, cash is the utmost element in financial management, which forms the basics to the value creation and quantification. Business cashflow is an integral part in the whole process of business management and, as such, the quality of cashflow has a direct impact on the business performance. For an airlines to maintain its sustainable competitiveness, the most necessary and effective strategy is to rationalize its cashflow management mechanism.This article attempts a research into the theories in conjunction with case study of sixty strong articles collected from archive, internal data and inhouse surveys that include the annual reports for the years 2004-2006 of three major airlines as well as China Southern Airlines' cashflow management procedures and rules in the past years. Based on the data so collected and guided by the theories of financial management, cashflow management and risk management, this article studies the subjects and objectives of cashflow management. It analyses the features and industrial characteristics of airlines cashflow in the context of financing plan and finance market with an insight into the interaction of risk management and corporate strategies.This article conducts a specific analysis of the cashflow management system of China Southern Airlines, focusing its study on the managing tactics of airlines cashflow in terms of the centralized management of cashflow, management of cashflow financing and cashflow risk management. It aims at creating and adding value to the corporation by optimizing its cashflow system, with a particular attention to the centralized management model for "cash pool", the advantage of financial instruments and the perfected risk management system. By rationalizing the cashflow management procedures, it explores cashflow's inherent business value in airlines business operation with a view to best utilizing the cashflow in improving the airlines performance.Researchers here and overseas have conducted many a study over cashflow management, although much is to be expected for the research into the cashflow for airlines. The airlines cashflow demonstrates unique characteristics in terms of the large size of its cashflow and its complex structure with its sensitivity to market factors. This article makes a tentative research into the Value-Added Management of China Southern Airlines' Cashflow, with a view to providing reliable guide for cashflow management specific to transport industry.