Study on the Financial Risks of Listed Airlines-Based on Air China Case Study

Abstract

With the development of the scientific economy, air transport has become an important mode of transport in people's daily travel, and after the financial crisis in 2008, China's aviation industry has shown rapid development and good development opportunities - the average annual growth rate of passenger turnover exceeds 8%. However, there are still many problems in the development of China's aviation industry. All this is reflected behind the fact that China's aviation industry is facing great financial risks, and financial risks, as a common problem for listed companies, can have an impact on the operation and sustainable development of the company. In particular, the airline industry has been severely impacted by the global outbreak of the COVID-19 and the business environment has further deteriorated. It has therefore become particularly important for airlines to effectively identify and prevent financial risks in the complex macro environment and market context. This paper looks at the financial risks that listed airlines will face. Based on the annual reports of airlines, it explores the potential financial risks in the daily operations of airlines from real data, and makes suggestions on how to identify financial risks and make effective early warning and solution measures. Finally, using Air China as a case study, this paper explores the company's financial risks through financial statement analysis and DuPont analysis, and conclude and outlook on the above analysis.