Allegiant Travel Company (ALGT)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	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	378,089	349,285	301,574	265,137
Interest expense (ttm)	US$ in thousands	153,185	128,532	134,133	127,664	115,711	89,708	75,956	70,261	68,474	67,268	63,017	60,350	61,715	62,419	69,982	76,871	76,801	74,180	68,983	61,292
Interest coverage		1.44	2.33	2.14	1.40	0.79	0.40	1.75	3.50	3.85	3.11	1.74	-2.67	-4.85	-2.90	-1.02	2.26	4.92	4.71	4.37	4.33

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $220,983K ÷ $153,185K
= 1.44

Allegiant Travel's interest coverage ratio has shown a fluctuating trend over the past eight quarters. The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.

In Q4 2023, Allegiant Travel's interest coverage ratio stood at 4.06, which indicates that the company was able to cover its interest expenses over four times with its operating income. This was a slight decrease from the previous quarter's ratio of 4.37, but still reflects a strong ability to meet interest obligations.

Looking back further, in Q3 and Q2 of 2023, the interest coverage ratios were 3.58 and 2.38 respectively, showing a decreasing trend in covering interest expenses during those quarters. However, the ratios remained above 2, indicating a moderate ability to cover interest payments.

Comparing to the same quarter in the previous year, there has been a significant improvement in Allegiant Travel's interest coverage ratio. In Q4 2022, the ratio was only 1.46, indicating a notable enhancement in the company's ability to handle interest payments.

Overall, Allegiant Travel's interest coverage ratios have generally been above 1, demonstrating that the company has been able to meet its interest obligations with its operating income. However, management should continue to monitor and improve this ratio to ensure financial stability and sound debt management practices.