Alaska Air Group Inc (ALK)
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 | 687,000 | 818,000 | 782,000 | -257,000 | -1,753,000 |
| Interest expense | US$ in thousands | 142,000 | 121,000 | 94,000 | 117,000 | 87,000 |
| Interest coverage | 4.84 | 6.76 | 8.32 | -2.20 | -20.15 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $687,000K ÷ $142,000K
= 4.84
The interest coverage ratio for Alaska Air Group Inc has fluctuated over the past five years. It was negative in December 2020 and December 2021, indicating that the company's operating income was insufficient to cover its interest expenses during those periods. However, the ratio improved significantly in the subsequent years, reaching 8.32 in December 2022, 6.76 in December 2023, and 4.84 in December 2024.
The positive trend in the interest coverage ratio from 2022 onwards suggests that the company's ability to meet its interest obligations has strengthened over time. A higher interest coverage ratio is generally viewed positively by investors and creditors as it indicates a lower risk of default on debt payments. It is important for Alaska Air Group Inc to maintain this positive trajectory in order to demonstrate financial stability and better manage its debt obligations in the future.
Peer comparison
Dec 31, 2024