The Decline and Reorganization of Hainan Airlines

Abstract

At the beginning of 2020, the sudden new crown epidemic spread rapidly around the world, which had a huge impact on various industries. Especially in the air transport industry, the profit margins of various companies are gradually declining. The problems of Hainan Airlines have also gradually emerged. Due to the company's bond default and lack of internal control, it declared bankruptcy and reorganization. In this context, through research on Hainan Airlines' operating conditions and management strategies, it is proposed that the new crown epidemic is not the main factor affecting its bankruptcy reorganization. It is due to the continuous accumulation of various hidden dangers of the enterprise. And found that the main problems of Hainan Airlines are: (1) Insufficient profitability leads to the potential crisis of insufficient liquidity, and the company's assets cannot be effectively used, which drags down cash flow; (2) The transportation industry is under heavy competition pressure and there are diversions; (3) There are problems in internal management, and the excessive expansion in the early stage has led to the dislocation of Hainan Airlines' asset structure and the occurrence of insolvency. After a comprehensive analysis of the reasons for the bankruptcy and reorganization of Hainan Airlines, it is proposed to enhance the company's operational capabilities and conduct business in multiple ways to increase profits; to diversify financing and optimize the bond structure of Hainan Airlines; to further improve the internal control of the company to avoid further dictatorship. appear once.