American Airlines Group (AAL)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 2,614,000 3,266,000 2,148,000 -748,000 -10,226,000
Interest expense US$ in thousands 1,934,000 2,145,000 1,962,000 1,800,000 1,227,000
Interest coverage 1.35 1.52 1.09 -0.42 -8.33

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $2,614,000K ÷ $1,934,000K
= 1.35

The interest coverage ratio of American Airlines Group has shown a significant improvement over the past years. As of December 31, 2020, the ratio was reported at -8.33, indicating that the company had insufficient operating income to cover its interest expenses. However, there has been a notable positive trend in the subsequent years. By December 31, 2021, the interest coverage improved to -0.42, although it still remained below 1, signifying potential financial distress.

The company's interest coverage ratio continued to strengthen, reaching 1.09 by December 31, 2022, and further improving to 1.52 by December 31, 2023. This indicates that American Airlines Group was able to generate enough operating income to cover its interest expenses comfortably during these periods.

As of the latest available data on December 31, 2024, the interest coverage ratio stood at 1.35, reflecting a stable and sustainable financial position. Overall, the trend in the interest coverage ratio of American Airlines Group suggests that the company has made positive strides in managing its debt obligations and enhancing its financial stability over the analyzed period.


See also:

American Airlines Group Interest Coverage