Financial Risk Analysis And Control Strategy Of A Airline

In 2012,the opinions on promoting the development of civil aviation issued by the State Council clearly pointed out that civil aviation is an important strategic industry for China’s economic and social development.In recent years,with the continuous improvement of macro-economy,China’s civil aviation industry has maintained a good development trend.However,influenced by many factors such as international political and economic situation,aviation oil price and exchange rate change,air transport companies also face great challenges.In particular,the Sino-US trade frictions,the 737-MAX8 aircraft suspension and the outbreak of COVID-19 are the major factors that cause airlines to face huge financial risks.Therefore,based on the operating environment of airlines,it is of great practical significance to analyze the financial risks and explore the control measures.This paper takes a representative domestic airline A as the research object,selects the financial data from 2014 to 2018,uses literature research method,case study method,quantitative analysis method,qualitative analysis method,etc.to analyze its financial risks in detail.First,it uses Z-score Model to analyze the conclusion that the overall financial risk of A airline is relatively high.Then,it uses financial index analysis method to analyze the specific financial risk faced by A airline from five aspects of financing,investment,fund recovery,income distribution and exchange rate.It deeply analyzes the causes of various financial risks,including industry factors,market factors and system factors,but mainly the company’s own factors.Finally,the paper puts forward some control measures,including improving the financing risk management from the aspects of debt scale,financing structure and financing mode,strengthening the investment risk control from the aspects of investment object,investment scale and internal control,strengthening the fund recovery from the aspects of accounts receivable and inventory turnover,aviation oil cost management and improving profits,optimizing the income distribution policy from the aspects of cash dividends policy,strengthening policy research and distribution mode innovation,and controlling exchange rate risk from the aspects of analysis and early warning,optimization of foreign currency asset liability structure and hedging tools.Through the research of this paper,it can provide practical suggestions for A airline to improve its financial risk control ability,provide reference for other companies in the industry,help investors and creditors to understand the financial risk situation of A airline,and provide certain basis for state-owned assets management department and civil aviation industry authorities to formulate relevant policies.