Research On Foreign Exchange Risk Management Of Civil Aviation Enterprises Under Two-way Fluctuation Of Exchange Rate

Since the reform and opening up,China’s civil aviation industry has achieved sustained and rapid development,becoming the second largest air transport country and transportation power after the United States,playing an important role in China’s economic development and the development of the world’s civil aviation industry.China’s civil aviation industry is a typical export-oriented enterprise.Due to industry characteristics,civil aviation enterprises are affected by exchange rate fluctuations.However,after two major RMB exchange reforms and changes in the international economic situation in 2005 and 2015,China’s exchange rate formation mechanism has gradually matured,while the trend and amplitude of two-way exchange rate fluctuations have intensified.In this context,the civil aviation enterprises exposed to foreign exchange risk exposure have a great impact.The most obvious performance is that the amount of exchange gains and losses disclosed in the financial report is huge.For example,the exchange losses of the “four major airlines” in 2015 totaled 17.4billion.Yuan,seriously affecting the stability of corporate performance.Therefore,civil aviation enterprises have an urgent need for foreign exchange risk management to ensure the safety of business results.The study of how to measure and prevent foreign exchange risk exposure is of great significance to the development of civil aviation economy.This paper selects Eastern Airlines,which has one of the industry’s representative and one of the “four major airlines” as an example.By exploring the effectiveness and shortcomings of civil aviation enterprises in foreign exchange risk management,this paper proposes targeted foreign exchange risk management and prevention recommendations for civil aviation enterprises..This paper adopts the literature research method,the case study method and the combination of qualitative and quantitative methods.Based on the definition of foreign exchange risk exposure,influencing factors,measurement methods and management strategies,the paper firstly passes the civil aviation industry.The development status,characteristics and foreign exchange risk summary industry overview and explain the case company background,then analyze the case company in five subsections:(1)analysis of the impact of exchange rate fluctuations on corporate performance;(2)from operational hedging and financial hedging perspective(3)Measure the exposure of the company’sforeign exchange risk exposure,and test whether the enterprise effectively monitors foreign exchange risk;(4)Analyze the effectiveness of the company’s foreign exchange risk management;(5)Raise the problems that still exist in the enterprise.Finally,through the above qualitative and quantitative analysis,the conclusion is that although the foreign exchange risk management of Eastern Airlines has played a hedging effect,there is still a net foreign exchange risk exposure,which is mainly due to the imbalance of foreign currency liabilities and foreign currency assets and financial The hedging instrument is underutilized.In response to the problems existing in Eastern Airlines,specific suggestions were put forward,and the implications of the foreign exchange risk management of the civil aviation industry were proposed from the perspective of industry and policy.