Here's an unusual sighting in the airline industry these days: a stock offering.
AMR Corp., parent of American Airlines, plans to sell 13 million newly issued shares priced at $17.25, the company announced late Thursday. The Fort Worth company said in a statement that it wants to use the money for "general corporate purposes."
Stock offerings are unusual in the airline industry because the stock prices have plummeted for almost every carrier since Sept. 11, 2001. Shares have gained some ground since then, but many carriers are in bankruptcy.
"If you're going to invest in an airline, it's American you're going to invest in," said Michael Boyd, an airline consultant with The Boyd Group. "With American not in bankruptcy and having a pretty strong view of where they want to go, they're the one to bet on."
AMR last issued stock in 1992, said Tim Wagner, a company spokesman.
The company's stock has increased 48 percent since Sept. 1, he said. On Friday, shares of the company (ticker: AMR) fell 14 cents to $17.55. Because of the stock's overall gain and a recent drop in fuel prices, now is the right time, Wagner said.
"We made progress in our turnaround plan by cutting costs and reducing our capital requirements," he said. "We have about $1.25 billion in debt maturities and pension funding next year."
The stock offering could raise up to $224.3 million.
"Given the uncertainty that's always part of the airline business, we felt like it was prudent to take advantage of our improved stock price and add to our liquidity," Wagner said.
Although the old adage in the airline industry has been that the fourth and first quarters are traditionally slower times, that's now changing, Boyd said.
That means that American doesn't simply use this money during its slow periods as a cushion while it burns through cash, he said.
"There is no summer peak anymore," he said. "The difference is when people want to fly, their planes are full."
Further financial help for AMR could come from Congress in the form of a pension-reform bill.
According to a version the Senate passed this week, airlines would get longer time -- 20 years rather than 14 -- to pay into their employee pension programs.
American Airlines and the presidents of three labor unions representing various employees at the airline, released a joint statement supporting the bill.
"Passage of the Senate's pension bill is a huge step forward, and we urge the upcoming Senate/House Conference Committee to include the Senate's provisions in the final legislation," American said.
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