American Airlines Arranges $2.9 B in Financing

123jump.com Staff
17 Sep, 2009
New York City

AMR Corp, the parent of American Airlines surges after it arranges $2.9 billion in financing. This liquidity is in addition to the $1.3 billion capital raised earlier in the year. American Air will also upgrade American Eagle flight cabins and increase daily flights and capacity at its four hubs.

[R]11:00 AM New York – AMR Corp, the parent of American Airlines surges after it arranges $2.9 billion in financing. This liquidity is in addition to the $1.3 billion capital raised earlier in the year. American Airlines will also upgrade American Eagle flight cabins and increase daily flights and capacity at its four hubs.[/R]

AMR Corp gained 21.1% to $8.90 after the company raised $1 billion through the sale of frequent flier miles and arranged plane lease financing of $1.6 billion with GE Capital Aviation Services. GE will also loan additional $280 million in cash advance.

American Airlines will also increase flights from its four hubs at Miami, New York, Dallas Fort Worth and Chicago. The company plans to increase international capacity by 2.5% and domestic by 1% in 2010. The overall capacity increase in 2010 is estimated to be near 1%.

American Eagle will add first class cabin to its fleet of 25 Bombardier CRJ700 and will also purchase additional 22 planes with deliveries beginning in mid-2010.

Citibank will have a right to use the frequent flier miles in equal monthly installments over 2012 and 2016 and for the accounting purposes the funds received will be treated as loans.

The $2.9 billion in new liquidity is in addition to the $1.3 billion raised earlier in the year through private and public financing of new 737 to be delivered in 2011.