Study On The Identification And Prevention Of Financial Risks Of Aircraft Finance Leasing

The rapid economic development has led to an increasing demand for airline passengers and cargo,which has driven the high-speed expansion of the aviation industry.In order to further improve their operational efficiency and expand their market share,all airline enterprises are expanding their operation scale,updating their fleet structure,and increasing their routes and operating frequencies.However,as the most important asset of aviation enterprises,the value of aircraft is high,such as Airbus A320 series aircraft,the unit price of which exceeds 100 million U.S.dollars.Therefore,when aviation enterprises expand their fleet,they must consider the huge financial pressure brought by the introduction of aircraft.The widespread use of financial leasing in the aviation industry has enabled airline companies to obtain the long-term use of aircraft at a relatively low cost while renewing and expanding their fleets.Aircraft finance leasing has therefore become one of the major ways in which aviation firms import aircraft.At the same time,the financial risks arising from it also come into play.Financial risk is one of the key risks that companies need to defend themselves in the process of business development.The study and management of the financial risks faced by enterprises is of positive significance to the sustainable and healthy development of enterprises.Therefore,by analyzing and evaluating the potential financial risks in aircraft finance leasing projects and proposing corresponding preventive measures,it helps to improve the operation of aviation enterprises.As one of the three major airlines in China,China Southern Airlines Group Limited’s business development model and its approach to financial risk management have certain implications for other airline companies in the industry.Therefore,this paper takes the aircraft finance leasing business of Southern Airlines as an example and analyzes the financial risks faced by Southern Airlines in this finance leasing business.Using the hierarchical analysis method to evaluate the financial risks,the paper concludes that the most important factors affecting the financial risks of Southern Airlines in the aircraft finance leasing business are:interest rate risk,currency risk and a risk of liquidity.Finally,based on the results of the analysis,we propose countermeasures to prevent and solve the financial risks faced by China Southern Airlines in the aircraft finance leasing business.