Sizeable Absolute DebtEven with better leverage ratios, a large absolute debt stock leaves the company exposed to macro shocks and interest-rate moves. Material debt can constrain strategic flexibility, increase refinancing risk in tighter markets, and amplify losses if traffic or yields deteriorate over several months.
Weakened Free Cash Flow QualityA notable YoY drop in FCF and low conversion of earnings to cash reduce capacity to deleverage, fund capex, or return capital. For a capital-intensive airline, weaker FCF quality can force reliance on external financing and limits ability to absorb sustained cost or demand shocks over the medium term.
Margin Pressure RiskEasing gross and net margins point to structural cost or pricing pressure (fuel, competition, yield weakness). If sustained, margin compression will erode the recent profitability gains and could impair cash flows, making it harder to maintain investments and service debt in coming quarters.