Allegiant Travel Company (ALGT)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-152,008	102,627	89,121	164,981	220,983	299,570	286,542	179,243	91,647	35,779	132,979	245,700	263,929	208,947	109,893	-161,321	-299,352	-180,780	-71,580	173,514
Interest expense (ttm)	US$ in thousands	156,443	159,248	159,416	157,637	153,185	157,481	148,194	132,844	115,711	89,708	75,956	70,261	68,474	67,268	63,017	60,350	61,715	62,419	69,982	76,871
Interest coverage		-0.97	0.64	0.56	1.05	1.44	1.90	1.93	1.35	0.79	0.40	1.75	3.50	3.85	3.11	1.74	-2.67	-4.85	-2.90	-1.02	2.26

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-152,008K ÷ $156,443K
= -0.97

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company can easily meet its interest obligations, while a lower ratio suggests potential financial distress.

Analyzing Allegiant Travel Company's interest coverage ratio over the past few years, we observe the following trends:

1. The interest coverage ratio was 2.26 as of March 31, 2020, indicating the company had a moderate ability to cover its interest expenses.
2. However, from June 30, 2020, to December 31, 2024, the interest coverage ratio consistently declined, reaching negative values for multiple periods. This suggests that Allegiant Travel Company faced challenges in meeting its interest payments with its operating profits during these periods.
3. The interest coverage ratio improved slightly in recent quarters, showing a gradual recovery. As of December 31, 2024, the ratio was -0.97, still indicating a strained ability to cover interest expenses.

Overall, the trend in Allegiant Travel Company's interest coverage ratio reflects a period of financial difficulty, as indicated by the consistently low and, at times, negative values. Investors and stakeholders should closely monitor the company's performance and financial health to assess its ability to manage debt obligations effectively in the future.