• Posted on Thursday, May 15, 2008

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American renegotiates debt as airlines face tough times

By Trebor Banstetter | Fort Worth Star-Telegam

FORT WORTH — American Airlines and several other carriers are buckling their financial seat belts as the airline industry heads into increasingly turbulent skies.

AMR Corp., American's Fort Worth-based parent, said it has negotiated relief from restrictions on nearly $700 million in debt, an adjustment that will help keep the airline from defaulting on the loans and give it more breathing room over the next year.

The move suggests that American sees no letup in the difficult financial environment that led to a $328 million loss in the first quarter. It follows a decision by Dallas-based Southwest Airlines this week to mortgage 21 Boeing 737 jets to borrow $600 million from several European banks. And United and Northwest airlines have also renegotiated loan covenants.

Read the full story at Charlotte.com.

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