Large Absolute Debt LoadDespite better ratios, the still-large absolute debt in an aircraft-intensive business constrains flexibility. High nominal obligations increase interest and principal repayment schedules, limiting capacity to invest or absorb demand shocks and raising vulnerability in slower revenue periods.
Modest Margins And CyclicalityMid-single-digit net margins provide a limited buffer against revenue volatility common in airlines. The structural cyclicality of travel demand means earnings and returns can compress quickly, limiting retained earnings accumulation and the company’s ability to build long-term reserves.
Free Cash Flow VolatilityYear-to-year swings in free cash flow and only moderate cash conversion reduce planning certainty for capex, dividends and debt reduction. Volatility can force episodic external financing or deferment of investments, increasing execution risk for multi-year fleet and network plans.