China Airlines Profit Influence Factor Analysis

After the reorganization of the company, the aviation of our country formed the three major aviation group (Air China, China Eastern Airlines, China Southern Airlines)and local Airlines as Hainan Airlines. In recent years, Air China as the representative of the three big airlines got the profit and achieved a historic performance in fiscal year2010. But by various factors, the profit is not stable, there are all kinds of risks, such as the global economic crisis, oil prices, advanced foreign airlines competition, high-speed rail impact etc.. These factors create challenge to sustained profitability and develop steadily of China’s airlines companies.For the airlines, the sustainability of earnings, is an important indicator of profitability and the core competitiveness of enterprises. Especially has listed several major domestic airlines, if cannot maintain profit, will produce tremendous external pressure. The airlines want to keep and gradually raise the level of profitability. From the situation of airlines operation in recent years, most airlines in the global economic crisis occurs in2008had the deficit, and in economic recovery of2009,2010they achieved good operating performance, which illustrates the great effect of economic environment to the airlines.In fact, the economic environment is one of the factors which influence the profit of airline, there are many other factors. the airline must clearly recognize these factors, then active coping and deepen the management, in order to gradually increase the profitability and profit level.This paper has collected the all kinds of data, in order to carry on the overall review and analysis to the factor which affect airline profit. Firstly, Air China in2010and2011each financial index (operating performance, profitability, financial status, the main business etc.) were compared and analyzed by the data chart way, and it points out influencing factors that resulted in the change of indexes,building the foundation to analyze behind. Then, the article analyze airline competition situation from the competition inside the industry, industry competition, upstream suppliers and downstream consumers’bargaining power and other aspects of research, and give the profit factor from the other hand forward portion. After that, this article classified according to various factors, the favorable factors, adverse factors, other factors, then expounded various factors on profit impact process.For the various factors affecting profitability, it puts forward detailed suggestions and ideas in the second part, mainly from the" increase income" and" reduce cost", put forward to the specific pathway to increase income and reduce the cost. One is the rationalization proposals to each link of the airline operation, another part is the thinking vision to break through the traditional airlines management, for reference.Overall, based on the comprehensive research of the financial condition and operating status of Chinese aviation company, arrange all aspects of factors which affect airline profit, and proposes the science reasonable profit improvement suggestions and ideas, providing theory for our aviation company management and financial management. The results of this study is:one is a more comprehensive analysis of the factors which influence airline profit, two is creatively advances the way by which the airlines should pay attention to the problem and improve the profitability in operation management and financial management.