Research On Financial Strategy Optimization Of China Southern Airline Based On Sustainable Growth

Air-transport industry is an important strategic industry of national economy.For the development level,on the one hand,it reflects the modernization level,economic structure and opening level of a certain region even a country.On the other hand,it serves as an important indicator to measure national and regional competitiveness.In recent years,the air-transport industry began to develop rapidly.On the one hand,under the implementation of the "13th five-year plan" and the "One Belt and One Road" policy,the air-transport industry has a strong market tapping potential and a high profit growth point;on the other hand,the increase in the number of low-cost airlines and the improvement of high-speed rail coverage network on domestic short and medium hauls which threatens the impact of some domestic routes.As a consequence,the air-transport industry is confronted with the challenges of the severe market.In the macroeconomic environment,the enterprise is no longer pursuing the short-term high growth,sustainable growth of the development strategy to be implemented is the trend of the times instead.According to the financial strategy of sustainable growth capacity,the key idea is in the case of enterprise resources and capacity constraints,based on the balance of cash flow equivalently the balance between investment strategy and financing strategy,formulate the financial strategy which accords with the market reality and enterprise actual.The financial strategy enhances the sustainable growth capacity effectively,and achieves the aim of sustainable value creation ultimately.The financial strategy matrix is selected as the evaluation model which takes the difference between the actual growth rate and sustainable growth rate as the horizontal axis and the EVA value as the vertical axis to establish the model.In this paper,based on the annual report data of China Southern Airline,the financial matrix quadrant diagram of China Southern Airlines from 2015 to 2019 is obtained.It shows sustainable growth capacity and value creation during the period,combining the financial strategy adopted,and this paper analyses the financial strategy from three aspects: investment strategy,financing strategy and dividend strategy.It was found that the financing strategy of China Southern Airlines had the problems of unbalanced capital structure and single financing mode.There are some problems in investment strategy,such as capital extracorporeal circulation,heavy investment and light management and so on.In terms of distribution strategy,the existed problems are that the amount distributed is not appropriate and the mode is single.According to China Southern Airline,it is currently a value-creating,cash-poor enterprise.In terms of financing,it is suggested to enhance profitability,continuously increase the proportion of internal financing and gradually realize the diversified financing strategy.In terms of investment,it prefers to optimize the fleet allocation,reduction of operating costs and strengthen the project management which could steadily increase non-holding investment and mix diversified investment.In terms of distribution,dividends reduction or zero dividends are advocated and certainly have more modes of paying dividends.