Air Lease Corporation (AL)
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 | 1,327,690 | 1,462,600 | 407,413 | 1,054,030 | 1,121,440 |
| Interest expense | US$ in thousands | 794,429 | 708,963 | 546,178 | 513,016 | 474,758 |
| Interest coverage | 1.67 | 2.06 | 0.75 | 2.05 | 2.36 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,327,690K ÷ $794,429K
= 1.67
The interest coverage ratio for Air Lease Corporation experienced some fluctuations over the five-year period from December 31, 2020, to December 31, 2024. The company's interest coverage ratio was 2.36 in 2020, indicating that Air Lease Corporation generated sufficient earnings to cover its interest expense 2.36 times over.
However, in 2021, the interest coverage ratio decreased to 2.05, which may suggest a slight weakening in the company's ability to meet its interest obligations from its operating income.
By the end of 2022, the interest coverage ratio dropped significantly to 0.75, which could raise concerns about Air Lease Corporation's ability to cover its interest expenses with its earnings.
In 2023, the interest coverage ratio improved to 2.06, showing a partial recovery in the company's ability to service its interest payments.
Lastly, by the end of 2024, the interest coverage ratio decreased again to 1.67, indicating a potential challenge for Air Lease Corporation in meeting its interest obligations from its operating income.
Overall, the fluctuating trend in the interest coverage ratio over the years suggests varying levels of financial health and the importance of monitoring the company's ability to meet its interest payments in relation to its operating income.
Peer comparison
Dec 31, 2024