Allegiant Travel Company (ALGT)

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	-152,007	312,237	120,664	265,094	-299,352
Interest expense	US$ in thousands	156,443	153,186	115,711	68,474	61,715
Interest coverage		-0.97	2.04	1.04	3.87	-4.85

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-152,007K ÷ $156,443K
= -0.97

Based on the provided data, Allegiant Travel Company's interest coverage ratio has shown fluctuations over the past five years.

As of December 31, 2020, the interest coverage ratio was a concerning -4.85, indicating that the company's operating income was insufficient to cover its interest expenses, potentially signaling financial distress.

By December 31, 2021, the interest coverage ratio improved significantly to 3.87, suggesting that Allegiant Travel Company was better positioned to meet its interest obligations from its operating profits.

However, the ratio declined to 1.04 by December 31, 2022, which could be a cause for caution as it indicates a tighter ability to cover interest expenses with operating income.

There was a slight improvement in the interest coverage ratio to 2.04 by December 31, 2023, but it still remains relatively low, potentially indicating continued financial risk.

The ratio then decreased to -0.97 by December 31, 2024, falling back into negative territory. A negative interest coverage ratio implies that the company's operating income is insufficient to cover its interest expenses, which could raise concerns about its financial stability and ability to meet debt obligations.

Overall, Allegiant Travel Company's interest coverage ratio has fluctuated over the years, with both positive and negative trends, highlighting the importance of monitoring the company's financial performance and debt servicing capabilities. Further analysis of the company's income and expense structure may be necessary to fully evaluate its financial health and risk profile.