A Case Study Of The Impact Of Exchange Rate Fluctuation On The Financing Of China Southern Airlines

The airline belongs to capital intensive enterprises,the financing demand is large,the mode of financing with debt financing,equity transfer,lease financing and guarantee.In August 11,2015,the central bank's central parity adjustment mechanism of RMB exchange rate triggered a sharp fall in the exchange rate of RMB against the US dollar.China's airlines generally have huge US dollar debt,which is affected by the depreciation of the RMB,resulting in large exchange losses.Therefore,this paper takes airlines as the research object,focuses on the impact of exchange rate on financing methods,and provides financial proposals for airlines to effectively respond to exchange rate risks.This paper is divided into four chapters.The first chapter,a brief description of the research background and significance,the domestic and foreign related research results are summarized;the second chapter mainly introduces the use of several financing way of Southern Airlines and the advantages and disadvantages of risk;the third chapter,analysis of the impact of exchange rate fluctuations on each kind of financing mode,and the measures taken by China Southern Airlines theory to deal with the exchange rate risk in the financing way;the fourth chapter introduces Southern Airlines for exchange rate fluctuations actually take financing initiatives and by comparing to other airlines,analyzes its timeliness and effectiveness;the last chapter,according to the exchange rate risk,provide in financing and other aspects of the proposal for China Southern airlines.Through the analysis,it is concluded that the domestic airlines have not taken effective measures to deal with the exchange rate risk before 2015,but the exchange rate fluctuation has an obvious influence on the financing mode of the airlines.When the RMB exchange rate is low,South Airlines is more inclined to issue various long and short term RMB bonds and borrow RMB bank loans,and avoid introducing aircraft and borrowing foreign currency bank loans in the way of financial leasing.When the RMB exchange rate is stable or high,the situation is the opposite.The analysis also shows that the impact of exchange rate fluctuation on airlines' equity financing is not obvious.In addition,domestic airlines should apply all kinds of financial instruments prudently to avoid risks arising from exchange rate fluctuations and accompanying interest rate changes.