Financial Analysis on Air China Limited

Research Article
Open access

Financial Analysis on Air China Limited

Jiayi Ma 1*
  • 1 Soochow University    
  • *corresponding author 2002409008@stu.suda.edu.cn
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/31/20231492
AEMPS Vol.31
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-083-7
ISBN (Online): 978-1-83558-084-4

Abstract

The outbreak of COVID-19 has caused a significant decline in the aviation service industry's operating conditions due to the decrease in people's travel volume. This study conducts a fundamental performance analysis of Air China, in comparison with China Southern and China Eastern Airlines, using critical accounting analysis and data disclosed in the 2021 annual financial statements. The analysis includes liquidity, solvency, efficiency, and return on investments, providing a measurement of the potential of Air China in the Chinese civil aviation industry in the post-pandemic era. The study provides suggestions for investors based on the value of Air China. The results of the analysis show that Air China has maintained good liquidity with a current ratio of 0.51, indicating that the company can meet its short-term liabilities. Solvency analysis indicates that the company has a debt-to-equity ratio of 1.05, which is lower than China Southern and China Eastern Airlines, indicating that Air China has less financial risk. The efficiency analysis shows that Air China has a better asset turnover ratio than its peers, indicating better management of its assets. Return on investment analysis indicates that Air China has a better return on equity than other two competitors, indicating a higher potential for investor returns. Overall, the study suggests that Air China has the potential to perform well in the Chinese civil aviation industry in the post-pandemic era. Investors should consider Air China as a viable investment option, given its good liquidity, solvency, efficiency, and return on investment.

Keywords:

airline industry, fundamental analysis, financial valuation

Ma,J. (2023). Financial Analysis on Air China Limited. Advances in Economics, Management and Political Sciences,31,40-47.
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References

[1]. National Business Daily, http://www.nbd.com.cn/, last accessed 2023/4/1.

[2]. Li, X.: Aviation industry rebounds. China Economic Times 01 (2023).

[3]. Li, M.: Several listed airlines disclosed data for January, and major operating indicators rebounded comprehensively. Securities Times 06 (2023).

[4]. Air China 2021 Annual Report. http://et.airchina.com.cn/en/investor_relations/images/financial_info_and_roadshow, last accessed 2023/4/1.

[5]. China Eastern2021 Annual Report. https://pdf.dfcfw.com/pdf/H2_AN202203301556077188, last accessed 2023/4/1.

[6]. China Southern2021 Annual Report. www.cs.com.cn, last accessed 2023/4/1.

[7]. 2020 Statistical Bulletin on the Development of the Civil Aviation Industry. www.gov.cn, last accessed 2023/4/1.

[8]. Xia, M.: Comparison of the Financial Situation of Three Major Domestic Airlines under the Epidemic. Yanbian University (2021).

[9]. Price and Value to Book Ratio by Sector (US). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pbvdata.htmlAswath Damodaran, last accessed 2023/4/1.

[10]. Luo, F., Shu, A., Gan, Q., et al.: Suggestions for Improving Flight Recovery and Operating Quality in the Post-Epidemic Era. Comprehensive Transportation, 1-13 (2023).

Cite this article

Ma,J. (2023). Financial Analysis on Air China Limited. Advances in Economics, Management and Political Sciences,31,40-47.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development

ISBN：978-1-83558-083-7(Print) / 978-1-83558-084-4(Online)
Editor：Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.31
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. National Business Daily, http://www.nbd.com.cn/, last accessed 2023/4/1.

[2]. Li, X.: Aviation industry rebounds. China Economic Times 01 (2023).

[3]. Li, M.: Several listed airlines disclosed data for January, and major operating indicators rebounded comprehensively. Securities Times 06 (2023).

[4]. Air China 2021 Annual Report. http://et.airchina.com.cn/en/investor_relations/images/financial_info_and_roadshow, last accessed 2023/4/1.

[5]. China Eastern2021 Annual Report. https://pdf.dfcfw.com/pdf/H2_AN202203301556077188, last accessed 2023/4/1.

[6]. China Southern2021 Annual Report. www.cs.com.cn, last accessed 2023/4/1.

[7]. 2020 Statistical Bulletin on the Development of the Civil Aviation Industry. www.gov.cn, last accessed 2023/4/1.

[8]. Xia, M.: Comparison of the Financial Situation of Three Major Domestic Airlines under the Epidemic. Yanbian University (2021).

[9]. Price and Value to Book Ratio by Sector (US). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pbvdata.htmlAswath Damodaran, last accessed 2023/4/1.

[10]. Luo, F., Shu, A., Gan, Q., et al.: Suggestions for Improving Flight Recovery and Operating Quality in the Post-Epidemic Era. Comprehensive Transportation, 1-13 (2023).

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