American Airlines has raised $2.9 billion in cash and financing in “a show of strength”, to help it through the global downturn in air travel and to expand at four U.S. hubs to prepare for a recovery in travel demand.
The group said $1bn of the total came from advanced sales of frequent flyer miles to Citigroup bank and American parent AMR Corp. rose the most in 11 months of New York trading. GE Capital Aviation Services provided $1.6 billion in jet-financing commitments.
“This is the time for a show of strength,” Chief Financial Officer Tom Horton said in an interview. “As capital flows in this industry, we believe it should flow to the strongest companies. Our company represents that.”
The airline also said it would add capacity at key US airports and shares in AMR jumped 18% on the back of the news.
“Today’s announcement positions our company well to face today’s industry challenges and allows us to remain focused on the future and on returning to profitability,” said AMR chairman Gerard Arpey.
Reports suggest that American Airlines is in discussions with Japan Airlines about taking a stake in the troubled Japanese carrier.