Oct. 1--AMR Corp. plans to repay $545 million in aircraft debt in the fourth quarter, the parent of American Airlines Inc. said Monday.
In a press release, the Fort Worth-based company said the prepayment was "part of AMR's ongoing efforts to buttress its financial foundation and strengthen its balance sheet."
"With our improving financial performance, we have bolstered our liquidity position and we have opportunistically strengthened our balance sheet by reducing debt," chief financial officer Thomas W. Horton said.
"While we have more work to do, our recent decisions not only improve our balance sheet, but also reduce our interest burden going forward and give us more financial flexibility for the future," said Mr. Horton, who also holds the title of executive vice president of finance and planning.
The 10-year debt, which would mature in December 2012, is secured by 16 airplanes. Prepayment would eliminate about $25 million in debt, AMR said.
The company has repaid $1.3 billion in scheduled principal due this year. In addition, subsidiary American Eagle Airlines, Inc. has prepaid $159 million in debt on Canadair regional jets, including $32 million in the third quarter, AMR said.
The company said estimated that it ended the third quarter Sunday with about $5.7 billion in cash and short-term investments, up from $5.5 billion and $464 million a year earlier.
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