Financial Performance and Risk Management Strategies in Selected China Airlines: Basis for a Foreign Exchange Mitigation Framework

Abstract

This study investigates the interplay between risk identification, exchange rate exposure, foreign exchange risk response, and financial performance in the airline industry in China. Using data from industry participants and employing structural equation modeling, the analysis reveals that risk identification significantly impacts financial performance by enabling proactive management of exchange rate volatility. Additionally, exchange rate exposure directly affects both foreign exchange risk responses and financial outcomes. The findings emphasize the importance of integrated risk management practices to enhance financial stability and operational efficiency. Implications for industry practices and future research directions are discussed.