Research On The Causes And Countermeasures Of Hainan Airlines’ Bond Default

Since the beginning of 2020,the novel coronavirus pneumonia epidemic has spread rapidly around the world.Governments have successively introduced a series of traffic restrictions and quarantine measures to prevent the spread of the epidemic.Passenger travel demand and willingness have fallen sharply,and the air transport industry has been greatly affected.Under this impact,the disadvantages of Hainan Airlines Holding Co.,Ltd.(hereinafter referred to as “HNA Holdings” and “Hainan Airlines”)’s liability business model began to appear.The cash flow generated by its operating activities in 2020 has been significantly negatively affected,resulting in Multiple borrowing defaults and bond defaults have caused huge adverse effects.This article conducts research on Hainan Airlines’ bond defaults and analyzes the reasons.It is believed that HNA’s current debt default is not a black swan event under the new crown epidemic,but is caused by the accumulation of various hidden danger factors at the beginning of HNA’s listing.This article first sorts out the current timeline of Hainan Airlines’ bond defaults,sorts out the key time points of Haiquan’s default and the related situation of bond rating downgrades,and uses the Z-score model to make a preliminary analysis of the financial risks of Hainan Airlines and the other four major airlines.According to the analysis of Hainan Airlines,it is concluded that Hainan Airlines’ bond default is not just an emergency under the epidemic,but has already existed hidden dangers.Then this article concludes through analysis: Hainan Airlines’ bond default is a combination of internal and external factors.From the perspective of external factors,the most direct cause is the sharp decline in operating income caused by the sudden new crown epidemic.In addition,there is also increasing industry competition in the air transport industry itself.From the perspective of the company’s internal management,it is mainly due to the lack of liquidity caused by the excessive expansion of Hainan Airlines in the early stage,and the inherent liability management model of Hainan Airlines which leads to the dislocation of asset structure and credit risk;at the same time,Hainan Airlines has repeatedly disclosed information Violations also reflect its potential internal control problems.From the perspective of the company’s internal financial problems,the lack of profitability of Hainan Airlines in recent years has led to a potential crisis of insufficient liquidity,and the low efficiency of asset operation has made the company’s assets ineffective and dragged down cash flow.After comprehensively analyzing the reasons for Hainan Airlines’ bond defaults,this article believes that Hainan Airlines should scientifically formulate strategic planning,abandon short-term debt and long-term financing methods,steadily improve corporate operating capabilities,and complete repayment with active cooperation with restructuring,and carry out transformation and upgrading.Consolidate the status of the four major airlines.In light of the current reality,the regulatory authorities should also improve the rating efficiency and improve the information disclosure system to better help bond investors avoid bad debts.They should also promptly warn companies that are at risk and turn remedial issues afterwards into pre-analysis issues.