A Discussion On Foreign Exchange Risk Management Of XM Airlines

The world economy is undergoing a series of important changes.After a decade of resurgent growth following the financial crisis,the global economy may have hit the peak of the growth cycle and is beginning to turn down.Monetary policy has shifted in developed economies,with FED cutting interest rates twice this year.Sino-us frictions have extended beyond trade and need to be prepared for a long-term response.We can deeply feel the impact of changes in the external environment.The RMB exchange rate also broke 7 in August.Foreign exchange risks are increasingly affecting the operation of foreign-related enterprises and even the survival of enterprises.Firstly,this paper introduces the research of foreign exchange risk management at home and abroad,and expounds the concept of foreign exchange risk and relevant theories.Secondly,based on the situation of recent global aviation economy and domestic aviation industry development planning,this paper analyzes the impact of exchange rate fluctuations on the benefits of domestic airlines in recent years,indicating that domestic airlines generally have high foreign currency liabilities and insufficient use of financial hedging.Thirdly,it analyzes the main foreign exchange risks of XM airlines at the present stage,reviews and summarizes the measures taken by the company to cope with the reform of RMB exchange rate since 2005,and points out the problems in current foreign exchange risk management,such as lack of attention,imperfect system,lack of professionals and insufficient informatization,Imperfect foreign risk management process and method.Finally,suggestions are put forward for the foreign exchange risk management of XM airlines,including improvement on the foreign exchange management mechanism,enhancement of the awareness of all employees,establishment of procedures and systems,and strengthening of informatization and personnel training.It is proposed that the company should conduct classified management on economic risk,transaction risk and translation risk,and set management objectives.The company should take such measures as contract negotiation,centralized management of foreign exchange funds,optimization of debt structure,expansion of aircraft procurement channels,financial hedging business,emphasis on foreign exchange cash flow forecast and asset value management to achieve effective control of foreign exchange risks.In the first half of 2019,China’s economic performance remained basically stable with GDP growing by 6.3%year on year.However,due to the impact of the trade dispute between China and the United States,the political bureau meeting of the second quarter request that we must increase the awareness of the dangers to treat with the increasing downward pressure on the economy in the second half of the year.This paper hopes to enlighten the company,industries and other enterprises in foreign exchange risk management,help enterprises and industries to cope with the challenges of foreign exchange risks better.The paper hopes to help enterprises maintain stable development in the complex global competition and achieve the evergreen foundation.