Foreign Exchange Risk Management of Air Transportation Listed Companies

Abstract

Under the premise of the adoption of a managed floating exchange rate in China, listed companies are facing more and more foreign exchange risk, subsequently embodied in trading risk, accounting risk, management risk, and so on. In the globalization context, the market creates new challenges. The market has seen the influence of the financial crisis and its instability has increased; however, exchange rates' volatility increased, and it is more difficult to predict the change trend. By dividing the foreign exchange risk into accounting risk, transaction risk, and economic risk, the authors specify the target, process, and methods of foreign exchange risk management. Through the air transportation listed company's solvency analysis, the authors found that compared with general industry, the industry stands out because its foreign exchange risk is even bigger. Aiming at this situation, the authors take China Southern for example. By studying its main form of foreign exchange risk and the main means of foreign exchange risk management, the authors clarify the significance of the foreign exchange risk management. The last part is about summarizing. The authors put forward the feasible foreign exchange risk management countermeasures for the similar listed company.