China Southern Airlines Financing Risk And Prevention Research

In recent years, along with the rapid development of China’s aviation societyand economy, Chinese aviation industry is also showing the vigorous developmenttrend. In the fierce market competition in the air transport industry, the major airlinesin order to meet the growing demand of production scale and enhance theircompetitive strength, have to gain valuable means of financing capital needs.Company financing for airlines and key, only a steady stream of cash flow tomaintain the company’s normal operation and management activities, and becomethe company’s profit foundation. However, the airline financing activities and the useof the process, once or improper use of funds for financing the management, willproduce incalculable risk financing, leading the company to reduce the profitabilityof income, even in financial crisis and bankruptcy. Therefore, the financing risk andprevention research has a very important practical significance. In this paper, forexample Southern Airlines, China Southern Airlines detailed analysis of majorfinancing risk, compared to the financing structure and condition of the Southern andWestern Airlines.The first chapter is the cause of the airline and type of financing risk analysissection, mainly on the current situation in the financing, financing the project type,the need for airlines and financing risk margin financing risk prevention. The thirdchapter analyzes the three major Southern financial risk types-aircraft leasing risk,debt financing and equity financing, and in-depth analysis of the characteristics andcauses of these financing risk. The fourth chapter cited some Western airlines comparison, analysis of Southern and Western Airlines and its dissimilarity betweenfinancing risks, explore Western aviation financing and risk prevention measuresmerit. The fifth chapter is the third h and fourth chapters of the risk for the analysis,based on risk management models and technical methods related literature providedby the proposed financing corresponding risk management and control measures.This paper is intended to help China Southern Airlines and China proper response totheir existence other financing risks, in order to gain a competitive advantage in thedomestic and international business activities.