Delta Air Lines Inc (DAL)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,521,000 | 3,661,000 | 1,886,000 | -12,469,000 | 6,618,000 |
| Interest expense | US$ in thousands | 42,000 | 45,000 | 55,000 | 32,000 | 29,000 |
| Interest coverage | 131.45 | 81.36 | 34.29 | -389.66 | 228.21 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,521,000K ÷ $42,000K
= 131.45
The interest coverage ratio for Delta Air Lines, Inc. has exhibited significant volatility over the past five years. In 2019, the interest coverage ratio was strong at 21.99, indicating the company's ability to cover its interest expenses nearly 22 times over from its operating profits. However, the ratio deteriorated in the subsequent years, notably dropping to -8.82 in 2020 and -2.33 in 2021, suggestive of potential financial strain and the company's inability to generate sufficient operating income to cover interest costs during those periods.
The interest coverage ratio showed some improvement in 2022, reaching 3.42, but it was still comparatively low, indicating moderate coverage of interest expenses by operating profits. In the most recent year, 2023, the interest coverage ratio further improved to 7.66, signaling a better ability to meet interest obligations with operating income compared to the previous years.
Overall, Delta Air Lines, Inc.'s interest coverage ratio has fluctuated considerably, reflecting varying levels of financial health and operational efficiency over the observed period. Moving forward, sustained improvement in the interest coverage ratio will be important for the company to demonstrate its ability to comfortably meet interest payments through operating earnings and enhance its long-term financial sustainability.
Peer comparison
Dec 31, 2023