Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Delta Air Lines Inc., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Debt to Equity
- The debt to equity ratio showed a steady increase from 0.64 in 2017 to 0.73 in 2019, followed by a sharp and significant spike reaching 19.01 in 2020 before declining to 6.93 in 2021. When including operating lease liabilities, the ratio follows a similar pattern, peaking even higher at 23.17 in 2020 and decreasing to 8.92 in 2021. This indicates a substantial rise in debt relative to equity during 2020, likely linked to extraordinary financial pressures.
- Debt to Capital
- This ratio remained relatively stable around 0.39 to 0.42 from 2017 to 2019 but dramatically increased to 0.95 in 2020 and slightly decreased to 0.87 in 2021. Including operating lease liabilities, the values are higher but follow a comparable trend, rising from 0.39 in 2017 to 0.96 in 2020 and moderating to 0.90 in 2021. The elevated ratios in 2020 and 2021 suggest a significant shift toward capital structure dependency on debt.
- Debt to Assets
- The debt to assets ratio was stable around 0.16 to 0.17 from 2017 through 2019 but doubled to 0.40 in 2020 before slightly decreasing to 0.37 in 2021. Including operating leases shows a higher level of debt relative to assets, increasing from 0.17 in 2017 to 0.49 in 2020 and then decreasing marginally to 0.48 in 2021. This trend reflects increased leverage and asset financing through debt in the most recent years.
- Financial Leverage
- Financial leverage increased from a moderate 3.83 in 2017 to 4.40 in 2018, then slightly declined in 2019 to 4.20 before experiencing an extreme jump to 46.93 in 2020 and subsequently declining to 18.64 in 2021. This indicates a sharp rise in liabilities relative to equity capital in 2020 followed by partial recovery but still elevated risk exposure.
- Interest Coverage
- Interest coverage ratio improved from 15.40 in 2017 to 21.59 in 2019, indicating strong ability to cover interest expenses during this period. However, it plunged dramatically to a negative ratio of -15.78 in 2020, reflecting operating losses or earnings insufficient to meet interest obligations, then modestly improved to 1.31 in 2021. This pattern highlights significant operational challenges and weakened solvency in 2020, with some recovery thereafter.
- Fixed Charge Coverage
- Fixed charge coverage followed a similar trajectory as interest coverage, with a steady increase from 4.36 in 2017 to 5.72 in 2019, then falling sharply to -7 in 2020, indicating inability to meet fixed financial obligations during that year. It rebounded to 1.19 in 2021 but remains well below pre-2020 levels, suggesting ongoing financial stress though with some improvement.
Debt Ratios
Coverage Ratios
Debt to Equity
Delta Air Lines Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of debt and finance leases | 1,782) | 1,732) | 2,287) | 1,518) | 2,242) | |
| Debt and finance leases, excluding current maturities | 25,138) | 27,425) | 8,873) | 8,253) | 6,592) | |
| Total debt | 26,920) | 29,157) | 11,160) | 9,771) | 8,834) | |
| Stockholders’ equity | 3,887) | 1,534) | 15,358) | 13,687) | 13,910) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 6.93 | 19.01 | 0.73 | 0.71 | 0.64 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| FedEx Corp. | 0.86 | 1.20 | 0.99 | — | — | |
| Uber Technologies Inc. | 0.66 | 0.64 | — | — | — | |
| Union Pacific Corp. | 2.10 | 1.58 | — | — | — | |
| United Airlines Holdings Inc. | 7.03 | 4.75 | — | — | — | |
| United Parcel Service Inc. | 1.54 | 37.53 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Transportation | 1.63 | 2.02 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.37 | 1.82 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 26,920 ÷ 3,887 = 6.93
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period from 2017 to 2021 reveals significant fluctuations in the company's capital structure and financial leverage.
- Total Debt
-
Total debt demonstrates a consistent upward trend from 2017 to 2019, increasing from US$8,834 million to US$11,160 million. However, there is a marked surge in 2020, where total debt escalates dramatically to US$29,157 million, followed by a slight reduction to US$26,920 million in 2021. This substantial increase in 2020 suggests a considerable borrowing activity, possibly reflecting responses to external stress or strategic financing decisions.
- Stockholders’ Equity
-
Stockholders’ equity remains relatively stable from 2017 through 2019, fluctuating moderately between US$13,687 million and US$15,358 million. In 2020, however, equity plummets sharply to US$1,534 million, indicating a substantial erosion of net assets. A partial recovery is observed in 2021 with equity rising to US$3,887 million, but it remains significantly below pre-2020 levels. This decline suggests adverse impacts on retained earnings or other comprehensive income during 2020.
- Debt to Equity Ratio
-
The debt to equity ratio reflects leverage trends and risk exposure, showing modest increases from 0.64 in 2017 to 0.73 in 2019, indicating a stable and balanced capital structure. However, 2020 exhibits an extraordinary spike to 19.01, a direct consequence of heightened debt and diminished equity. By 2021, this ratio improves to 6.93 but remains substantially elevated compared to earlier years, signifying sustained high leverage and potential financial vulnerability.
Overall, the data indicate that the company experienced significant financial stress or strategic shifts in 2020, characterized by a large increase in debt and a drastic reduction in equity. Although some recovery occurred in 2021, leverage remained markedly higher than in the pre-2020 period, suggesting ongoing financial risk and the need for cautious monitoring of capital structure and solvency.
Debt to Equity (including Operating Lease Liability)
Delta Air Lines Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of debt and finance leases | 1,782) | 1,732) | 2,287) | 1,518) | 2,242) | |
| Debt and finance leases, excluding current maturities | 25,138) | 27,425) | 8,873) | 8,253) | 6,592) | |
| Total debt | 26,920) | 29,157) | 11,160) | 9,771) | 8,834) | |
| Current maturities of operating leases | 703) | 678) | 801) | 955) | —) | |
| Noncurrent operating leases | 7,056) | 5,713) | 5,294) | 5,801) | —) | |
| Total debt (including operating lease liability) | 34,679) | 35,548) | 17,255) | 16,527) | 8,834) | |
| Stockholders’ equity | 3,887) | 1,534) | 15,358) | 13,687) | 13,910) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 8.92 | 23.17 | 1.12 | 1.21 | 0.64 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 1.51 | 1.97 | 0.99 | — | — | |
| Uber Technologies Inc. | 0.79 | 0.78 | — | — | — | |
| Union Pacific Corp. | 2.22 | 1.67 | — | — | — | |
| United Airlines Holdings Inc. | 8.17 | 5.69 | — | — | — | |
| United Parcel Service Inc. | 1.79 | 42.24 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Transportation | 2.02 | 2.51 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.54 | 2.00 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 34,679 ÷ 3,887 = 8.92
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited a significant increase over the period analyzed. From 2017 to 2018, debt nearly doubled, rising from 8,834 million US dollars to 16,527 million US dollars. This upward trend continued moderately into 2019, reaching 17,255 million US dollars. However, there was a sharp escalation in 2020, with total debt more than doubling compared to the previous year, amounting to 35,548 million US dollars. In 2021, total debt slightly decreased but remained elevated at 34,679 million US dollars, indicating sustained high leverage.
- Stockholders’ Equity
- Stockholders’ equity remained relatively stable from 2017 through 2019, oscillating moderately between 13,687 million and 15,358 million US dollars. A drastic reduction occurred in 2020, with equity dropping sharply to 1,534 million US dollars. This decline suggests a significant deterioration in net assets, possibly due to operational losses or other financial strains during that year. A partial recovery followed in 2021, where equity increased to 3,887 million US dollars but still remained substantially lower than the levels of 2017 to 2019.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The ratio of debt to equity signals a marked change in financial leverage. In 2017, the ratio was conservative at 0.64, indicating lower reliance on debt relative to equity. It escalated sharply to 1.21 in 2018, followed by a minor decrease to 1.12 in 2019. In 2020, the ratio surged dramatically to 23.17, reflecting the combined effect of a massive increase in debt and a collapse in equity. This elevated leverage level suggests heightened financial risk and potential difficulties in meeting obligations. In 2021, the ratio declined to 8.92, indicating some deleveraging or equity improvement but still representing a significantly riskier financial structure compared to the pre-2020 years.
Debt to Capital
Delta Air Lines Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of debt and finance leases | 1,782) | 1,732) | 2,287) | 1,518) | 2,242) | |
| Debt and finance leases, excluding current maturities | 25,138) | 27,425) | 8,873) | 8,253) | 6,592) | |
| Total debt | 26,920) | 29,157) | 11,160) | 9,771) | 8,834) | |
| Stockholders’ equity | 3,887) | 1,534) | 15,358) | 13,687) | 13,910) | |
| Total capital | 30,807) | 30,691) | 26,518) | 23,458) | 22,744) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.87 | 0.95 | 0.42 | 0.42 | 0.39 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| FedEx Corp. | 0.46 | 0.55 | 0.50 | — | — | |
| Uber Technologies Inc. | 0.40 | 0.39 | — | — | — | |
| Union Pacific Corp. | 0.68 | 0.61 | — | — | — | |
| United Airlines Holdings Inc. | 0.88 | 0.83 | — | — | — | |
| United Parcel Service Inc. | 0.61 | 0.97 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Transportation | 0.62 | 0.67 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.58 | 0.65 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 26,920 ÷ 30,807 = 0.87
2 Click competitor name to see calculations.
- Total Debt
- The total debt of the company showed a steady increase from 2017 to 2019, rising from $8,834 million to $11,160 million. Subsequently, there was a significant surge in 2020, where total debt almost tripled to $29,157 million. In 2021, total debt decreased slightly but remained substantially higher than the pre-2020 levels, ending at $26,920 million.
- Total Capital
- Total capital grew consistently from 2017 through 2021, increasing from $22,744 million to $30,807 million. The most pronounced rise occurred between 2019 and 2020, coinciding with the sharp increase in debt. The incremental growth slowed between 2020 and 2021, with total capital nearly stable around $30,700 million.
- Debt to Capital Ratio
- The debt to capital ratio remained relatively stable at around 0.39-0.42 from 2017 through 2019. There was a dramatic increase in 2020, where the ratio surged to 0.95, indicating a near doubling of leverage within total capital. In 2021, the ratio decreased modestly to 0.87, yet it remained significantly above the levels observed in earlier years.
Overall, the data reveals a substantial increase in financial leverage beginning in 2020, largely driven by a sharp rise in total debt. Despite consistent growth in total capital, the debt portion expanded more rapidly, resulting in elevated leverage ratios. This shift suggests increased reliance on debt financing during this period, with a slight deleveraging trend in the most recent year, although leverage remains high relative to previous periods.
Debt to Capital (including Operating Lease Liability)
Delta Air Lines Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of debt and finance leases | 1,782) | 1,732) | 2,287) | 1,518) | 2,242) | |
| Debt and finance leases, excluding current maturities | 25,138) | 27,425) | 8,873) | 8,253) | 6,592) | |
| Total debt | 26,920) | 29,157) | 11,160) | 9,771) | 8,834) | |
| Current maturities of operating leases | 703) | 678) | 801) | 955) | —) | |
| Noncurrent operating leases | 7,056) | 5,713) | 5,294) | 5,801) | —) | |
| Total debt (including operating lease liability) | 34,679) | 35,548) | 17,255) | 16,527) | 8,834) | |
| Stockholders’ equity | 3,887) | 1,534) | 15,358) | 13,687) | 13,910) | |
| Total capital (including operating lease liability) | 38,566) | 37,082) | 32,613) | 30,214) | 22,744) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.90 | 0.96 | 0.53 | 0.55 | 0.39 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 0.60 | 0.66 | 0.50 | — | — | |
| Uber Technologies Inc. | 0.44 | 0.44 | — | — | — | |
| Union Pacific Corp. | 0.69 | 0.63 | — | — | — | |
| United Airlines Holdings Inc. | 0.89 | 0.85 | — | — | — | |
| United Parcel Service Inc. | 0.64 | 0.98 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Transportation | 0.67 | 0.71 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.67 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 34,679 ÷ 38,566 = 0.90
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt experienced a substantial increase from 2017 to 2018, nearly doubling from 8,834 million USD to 16,527 million USD. It continued to rise slightly in 2019 to 17,255 million USD before escalating dramatically to 35,548 million USD in 2020. In 2021, the total debt slightly decreased to 34,679 million USD. This pattern indicates a sharp increase in the debt load, particularly between 2019 and 2020, followed by relative stabilization at high levels.
- Total Capital (including operating lease liability)
-
Total capital showed a steady upward trend over the five-year period. Starting at 22,744 million USD in 2017, it increased consistently to 30,214 million USD in 2018, 32,613 million USD in 2019, and further to 37,082 million USD in 2020. The upward trajectory continued in 2021, reaching 38,566 million USD. The continuous increase in total capital suggests ongoing investments or growth in equity and liabilities supporting the company's operations.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio rose significantly from 0.39 in 2017 to 0.55 in 2018, then showed a minor decrease to 0.53 in 2019. In 2020, the ratio surged notably to 0.96, indicating that debt comprised almost all of the total capital. In 2021, it slightly declined to 0.90, which still reflects a heavy reliance on debt financing relative to total capital. This progression highlights a marked increase in financial leverage, particularly during the 2020 period, possibly influenced by external pressures or strategic decisions.
Debt to Assets
Delta Air Lines Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of debt and finance leases | 1,782) | 1,732) | 2,287) | 1,518) | 2,242) | |
| Debt and finance leases, excluding current maturities | 25,138) | 27,425) | 8,873) | 8,253) | 6,592) | |
| Total debt | 26,920) | 29,157) | 11,160) | 9,771) | 8,834) | |
| Total assets | 72,459) | 71,996) | 64,532) | 60,266) | 53,292) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.37 | 0.40 | 0.17 | 0.16 | 0.17 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| FedEx Corp. | 0.25 | 0.30 | 0.32 | — | — | |
| Uber Technologies Inc. | 0.25 | 0.24 | — | — | — | |
| Union Pacific Corp. | 0.47 | 0.43 | — | — | — | |
| United Airlines Holdings Inc. | 0.52 | 0.48 | — | — | — | |
| United Parcel Service Inc. | 0.32 | 0.40 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Transportation | 0.36 | 0.38 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.30 | 0.33 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 26,920 ÷ 72,459 = 0.37
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a steady increase from 2017 through 2019, rising from $8,834 million to $11,160 million. A significant escalation occurred in 2020, where total debt surged sharply to $29,157 million, before slightly decreasing to $26,920 million in 2021. This indicates a substantial increase in leverage during the pandemic period, followed by a modest reduction.
- Total Assets
- Total assets showed a consistent upward trend across the entire period, increasing from $53,292 million in 2017 to $72,459 million by the end of 2021. The growth accelerated noticeably in 2020, continuing into 2021, suggesting investment or asset accumulation despite challenging conditions.
- Debt to Assets Ratio
- The debt to assets ratio remained relatively stable between 0.16 and 0.17 from 2017 through 2019. In 2020, the ratio increased dramatically to 0.40, reflecting the sharp rise in debt relative to assets. It slightly decreased to 0.37 in 2021, indicating some deleveraging, though the ratio stayed substantially higher than pre-2020 levels. This elevated ratio signals a higher financial risk profile during and following the pandemic peak.
Debt to Assets (including Operating Lease Liability)
Delta Air Lines Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of debt and finance leases | 1,782) | 1,732) | 2,287) | 1,518) | 2,242) | |
| Debt and finance leases, excluding current maturities | 25,138) | 27,425) | 8,873) | 8,253) | 6,592) | |
| Total debt | 26,920) | 29,157) | 11,160) | 9,771) | 8,834) | |
| Current maturities of operating leases | 703) | 678) | 801) | 955) | —) | |
| Noncurrent operating leases | 7,056) | 5,713) | 5,294) | 5,801) | —) | |
| Total debt (including operating lease liability) | 34,679) | 35,548) | 17,255) | 16,527) | 8,834) | |
| Total assets | 72,459) | 71,996) | 64,532) | 60,266) | 53,292) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.48 | 0.49 | 0.27 | 0.27 | 0.17 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 0.44 | 0.49 | 0.32 | — | — | |
| Uber Technologies Inc. | 0.29 | 0.29 | — | — | — | |
| Union Pacific Corp. | 0.50 | 0.45 | — | — | — | |
| United Airlines Holdings Inc. | 0.60 | 0.57 | — | — | — | |
| United Parcel Service Inc. | 0.37 | 0.44 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Transportation | 0.45 | 0.47 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.36 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 34,679 ÷ 72,459 = 0.48
2 Click competitor name to see calculations.
The financial data indicates a significant increase in total debt for the company over the analyzed period. Specifically, total debt rose from $8,834 million in 2017 to $34,679 million in 2021. This increase was particularly pronounced between 2019 and 2020, when total debt more than doubled from $17,255 million to $35,548 million. Following this peak in 2020, total debt slightly decreased in 2021 but remained substantially higher than in previous years.
Total assets also showed a steady upward trend, increasing from $53,292 million in 2017 to $72,459 million in 2021. This represents gradual growth throughout the period, with the largest single-year increase occurring from 2019 to 2020, when assets rose from $64,532 million to $71,996 million. However, asset growth was more moderate in the subsequent year.
The debt to assets ratio illustrates how the company’s leverage evolved alongside changes in debt and assets. This ratio increased significantly from 0.17 in 2017 to 0.48 in 2021. The sharpest rise occurred between 2019 and 2020, moving from 0.27 to 0.49, indicating that debt grew at a faster pace than assets during this time. The ratio slightly declined in 2021 but remained close to the previous year’s level, reflecting sustained higher leverage compared to earlier years.
- Total Debt
- Steady increase over the period with a sharp rise between 2019 and 2020 and a slight decrease thereafter.
- Total Assets
- Consistent growth with the largest increase occurring from 2019 to 2020, followed by more modest gains.
- Debt to Assets Ratio
- Marked increase reflecting higher leverage, peaking in 2020 and stabilizing slightly below this peak in 2021.
In summary, the data reveals a company that has taken on significantly more debt in recent years, particularly around 2020, resulting in increased leverage. While asset growth continued during the period, it did not keep pace with the escalated borrowing, suggesting a strategic shift toward greater financial risk or investment financed by debt.
Financial Leverage
Delta Air Lines Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 72,459) | 71,996) | 64,532) | 60,266) | 53,292) | |
| Stockholders’ equity | 3,887) | 1,534) | 15,358) | 13,687) | 13,910) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 18.64 | 46.93 | 4.20 | 4.40 | 3.83 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| FedEx Corp. | 3.43 | 4.02 | 3.06 | — | — | |
| Uber Technologies Inc. | 2.68 | 2.71 | — | — | — | |
| Union Pacific Corp. | 4.49 | 3.68 | — | — | — | |
| United Airlines Holdings Inc. | 13.56 | 9.99 | — | — | — | |
| United Parcel Service Inc. | 4.87 | 94.99 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Transportation | 4.48 | 5.38 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.52 | 5.49 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 72,459 ÷ 3,887 = 18.64
2 Click competitor name to see calculations.
- Total Assets
- Total assets showed a consistent upward trend from 2017 through 2021. The value increased from approximately $53.3 billion in 2017 to around $72.5 billion in 2021, indicating growth in the company's asset base over the five-year period. Notably, the largest incremental increase occurred between 2019 and 2020.
- Stockholders’ Equity
- Stockholders' equity initially remained relatively stable from 2017 to 2019, fluctuating around the $13.7 billion to $15.4 billion range. However, a significant decline occurred in 2020, dropping to about $1.5 billion, followed by a modest recovery to approximately $3.9 billion in 2021. This sharp decrease followed by partial recovery suggests considerable financial challenges impacting equity during 2020, potentially linked to extraordinary circumstances.
- Financial Leverage
- Financial leverage exhibited a stable pattern from 2017 through 2019, ranging between 3.8 and 4.4 times. A drastic escalation took place in 2020, skyrocketing to nearly 47 times, before substantially declining to approximately 18.6 times in 2021. This volatility reflects a significant increase in indebtedness or reduction in equity during 2020, with partial normalization in the following year.
Interest Coverage
Delta Air Lines Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | 280) | (12,385) | 4,767) | 3,935) | 3,577) | |
| Add: Income tax expense | 118) | (3,202) | 1,431) | 1,216) | 2,124) | |
| Add: Interest expense, net | 1,279) | 929) | 301) | 311) | 396) | |
| Earnings before interest and tax (EBIT) | 1,677) | (14,658) | 6,499) | 5,462) | 6,097) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 1.31 | -15.78 | 21.59 | 17.56 | 15.40 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| FedEx Corp. | 9.42 | 3.48 | 2.11 | — | — | |
| Uber Technologies Inc. | -1.20 | -14.24 | — | — | — | |
| Union Pacific Corp. | 8.33 | 7.12 | — | — | — | |
| United Airlines Holdings Inc. | -0.62 | -7.89 | — | — | — | |
| United Parcel Service Inc. | 24.91 | 3.63 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Transportation | 6.98 | -0.34 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Industrials | 5.14 | 1.25 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,677 ÷ 1,279 = 1.31
2 Click competitor name to see calculations.
- Earnings before Interest and Tax (EBIT)
- The EBIT experienced growth from 2017 to 2019, increasing from 6,097 million USD to 6,499 million USD, indicating improving operational profitability during this period. However, there was a sharp decline in 2020, with EBIT turning negative to -14,658 million USD, reflecting significant operational losses. In 2021, EBIT partially recovered to 1,677 million USD but remained below pre-2020 levels.
- Interest Expense, Net
- The net interest expense showed a gradual decrease from 396 million USD in 2017 to 301 million USD in 2019, suggesting reduced financing costs or debt levels. This trend reversed in 2020 and 2021, with net interest expense rising sharply to 929 million USD and 1,279 million USD respectively, indicating increased borrowing or higher interest rates.
- Interest Coverage Ratio
- The interest coverage ratio improved steadily from 15.4 times in 2017 to 21.59 times in 2019, signifying strong earnings relative to interest obligations. In 2020, the ratio turned negative to -15.78 times due to the significant EBIT loss, indicating inability to cover interest expenses from operating profits. In 2021, the ratio improved to 1.31 times but remained at a low level, pointing to a continued fragile financial position with limited buffer for interest payments.
Fixed Charge Coverage
Delta Air Lines Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | 280) | (12,385) | 4,767) | 3,935) | 3,577) | |
| Add: Income tax expense | 118) | (3,202) | 1,431) | 1,216) | 2,124) | |
| Add: Interest expense, net | 1,279) | 929) | 301) | 311) | 396) | |
| Earnings before interest and tax (EBIT) | 1,677) | (14,658) | 6,499) | 5,462) | 6,097) | |
| Add: Operating lease cost | 863) | 1,019) | 1,013) | 994) | 1,300) | |
| Earnings before fixed charges and tax | 2,540) | (13,639) | 7,512) | 6,456) | 7,397) | |
| Interest expense, net | 1,279) | 929) | 301) | 311) | 396) | |
| Operating lease cost | 863) | 1,019) | 1,013) | 994) | 1,300) | |
| Fixed charges | 2,142) | 1,948) | 1,314) | 1,305) | 1,696) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 1.19 | -7.00 | 5.72 | 4.95 | 4.36 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| FedEx Corp. | 2.83 | 1.50 | 1.19 | — | — | |
| Uber Technologies Inc. | -0.36 | -6.43 | — | — | — | |
| Union Pacific Corp. | 6.81 | 5.79 | — | — | — | |
| United Airlines Holdings Inc. | -0.01 | -3.58 | — | — | — | |
| United Parcel Service Inc. | 12.66 | 2.31 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Transportation | 3.86 | 0.41 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.44 | 1.12 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,540 ÷ 2,142 = 1.19
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax demonstrate a fluctuating trend over the observed period. Initially, the earnings slightly declined from 7,397 million USD in 2017 to 6,456 million USD in 2018. There was a recovery in 2019, with earnings increasing to 7,512 million USD. However, a significant and abrupt reversal occurred in 2020, where the figure declined sharply to a negative 13,639 million USD, indicating substantial operational and financial challenges during that period. By 2021, the earnings show a partial recovery to 2,540 million USD, although still markedly below pre-2020 levels.
- Fixed charges
- Fixed charges show a general upward trend throughout the years. In 2017, fixed charges stood at 1,696 million USD and slightly decreased to 1,305 million USD in 2018. They remained relatively stable in 2019 at 1,314 million USD but increased noticeably in 2020 to 1,948 million USD. This upward movement continued into 2021, reaching 2,142 million USD. The increasing fixed charges, especially during and after 2020, suggest rising expenses related to interest or lease obligations.
- Fixed charge coverage ratio
- The fixed charge coverage ratio improved from 4.36 in 2017 to 5.72 in 2019, reflecting an enhancing ability to cover fixed charges from earnings before fixed charges and tax. The ratio peaked prior to a dramatic deterioration in 2020, when it turned sharply negative at -7, corresponding with the substantial losses recorded. In 2021, the ratio recovered somewhat to 1.19 but remained considerably lower compared to the pre-2020 period, indicating limited capacity to cover fixed charges relative to earlier years.