The Impact Of Exchange Rate Risk On Airline Operations And Countermeasures

The economic globalization is like a double-edged sword.Chinese enterprises are facing many challenges while gaining opportunities in the wave of globalization.Among these challenges,the impact of exchange rate fluctuation on the management of Chinese enterprises is more and more profound.Since the reform and opening up,the RMB has developed from a fixed exchange rate to a floating exchange rate,and then the two-way fluctuation of the RMB exchange rate has occurred.In 2015,the "811 exchange rate reform" and the Sino-US trade war have caused thousands of BP fluctuations in the exchange rate of RMB against the US dollar in one day.For enterprises that need US dollar trading in their management,it is more and more difficult to predict the exchange rate fluctuations and exchange rate risks.The impact on enterprise management is also more and more profound.As an export-oriented enterprise,airlines have to face all kinds of foreign exchange business since the introduction of aircraft.From the perspective of aircraft ownership,almost all domestic airlines will incur foreign currency debts from purchasing aircraft to operating lease and financing lease.In the normal business cycle,foreign exchange receipts and expenditures will be involved in aviation materials,rent and foreign airline costs.Since 2015,under the influence of the Fed's interest rate increase expectation and the uncertainty of fiscal and tax policies in Europe and the United States,the pressure of RMB external depreciation expectation has been strengthened.After the exchange rate reform,RMB has depreciated against the US dollar for two consecutive years.Chinese airlines have suffered a large exchange loss.In 2017,the RMB exchange rate has rebounded against the US dollar,with an average appreciation of 6%,and airlines have gained that year.With the intensification of the Sino-US trade war in 2018,tariff barriers led to the increase of aircraft prices of imported Boeing companies,international aviation oil prices and operating costs of foreign airports.With the change of global economic situation,the RMB has resumed its depreciation trend.However,the exchange rate risk of China's Airlines has not been effectively controlled,and there still exists the guidance of exchange rate fluctuations.Operational losses resulting from this.Taking the US dollar exchange rate as an example,this paper makes a comprehensive and in-depth analysis of the influence of the change of US dollar exchange rate on the operation and management of airlines.The focus of the study is not limited to the exchange gains and losses in financial management,but to the exchange of foreign currency from four aspects: financial management,risk management,investment strategy and business route.The transmission mechanism of rate fluctuation is comprehensively analyzed.Combining with the characteristics of N's aviation economy,this paper takes Y company with outstanding local characteristics as an example,and makes a thorough analysis of its impact on exchange rate fluctuation and its solution strategies,to test the degree of impact of local airlines on exchange rate risk and the effectiveness of preventive measures.Thus,we can get the risk aversion countermeasures that Chinese airlines should adopt under the trend of exchange rate fluctuation,which can provide reference for domestic airlines and other companies in dealing with exchange rate risk.