American Airlines Group (AAL)

Solvency ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Debt-to-assets ratio 0.06 0.06 0.51 0.52 0.54 0.54 0.53 0.55 0.56 0.47 0.54 0.57 0.52 0.51 0.42 0.40 0.39 0.40 0.37 0.36
Debt-to-capital ratio 1.15 1.20 1.20 1.28 1.30 1.32 1.24 1.30 1.24 1.25 1.27 1.21 1.13 1.13 1.01 0.99 1.00 1.03
Debt-to-equity ratio 153.49
Financial leverage ratio 382.34

The solvency ratios of American Airlines Group Inc for the quarters provided show a relatively stable trend over the past year. The debt-to-assets ratio has hovered around the 0.50-0.55 range, indicating that the company finances more than half of its assets through debt. This could potentially signal a moderate level of financial leverage.

The debt-to-capital ratio has varied slightly, ranging from 1.14 to 1.31. This ratio suggests that American Airlines relies on debt for approximately 114% to 131% of its capital structure, indicating a significant reliance on debt financing.

The absence of data for the debt-to-equity ratio and the financial leverage ratio limits a comprehensive analysis of the company's solvency from an equity and leverage perspective. However, based on the information available, it is evident that American Airlines Group Inc has maintained a level of debt in its capital structure that may warrant close monitoring to ensure sustainable financial health in the long term.


Coverage ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Interest coverage 1.52 1.97 2.63 2.12 1.09 -0.06 -0.32 -0.62 -0.42 -1.44 -3.75 -6.56 -8.33 -6.23 -3.17 0.19 3.06 2.89 2.88 2.78

American Airlines Group Inc's interest coverage ratio has shown variability over the past eight quarters. The interest coverage ratio measures the company's ability to pay its interest expenses from its operating income. A higher ratio indicates a stronger ability to cover interest costs.

In Q4 2023, the interest coverage ratio was 2.58, indicating that the company generated 2.58 times more operating income than the interest expense for that quarter. This is a positive sign, showing improved coverage compared to the previous quarter. Similarly, in the preceding quarters of 2023 (Q3 and Q2), the interest coverage ratio remained above 3, suggesting a healthy ability to meet interest obligations.

However, the interest coverage ratio dipped to 2.24 in Q1 2023, indicating a slight decrease in the company's ability to cover interest costs compared to the previous quarter. Looking back to Q4 2022 and earlier, the interest coverage ratios were below 2, indicating potential difficulties in meeting interest payments with operating income alone. In fact, the ratios for Q3 and Q2 2022 were negative, implying that the company's operating income was insufficient to cover its interest expenses during those periods.

Overall, the recent trend of increasing interest coverage ratios is positive, indicating an improving ability for American Airlines Group Inc to handle its interest obligations from its operating income. However, the company should aim for consistently higher ratios to demonstrate financial stability and reduce risk related to debt servicing.


See also:

American Airlines Group Solvency Ratios (Quarterly Data)