American Airlines' AMR bolsters cash position, shifts capacity to hubs

— -- AMR/ (UPDATE 4):UPDATE 4-AMR bolsters cash position; shares soar

The Fort Worth-based carrier also announced changes in the number of flights at many major hub airports in its network and in its fleet of planes.

Investors responded positively, bidding up shares of parent company AMR nearly 20% to $8.80.

In a series of financial deals, American announced it was:

•Selling $1 billion worth of future frequent-flier miles to Citibank, its credit card partner.

•Selling 84 Boeing 737s, 16 of which it already flies and more that it will receive over the next two years, to GE Capital Aviation Services for $1.6 billion. GECAS will lease those planes back to American.

•Borrowing another $280 million from GECAS, using other aircraft as collateral.

About $1.3 billion of the money will appear on the airline's third-quarter balance sheet, boosting its expected cash balance to around $3.7 billion. Tom Horton, executive vice president and CFO of AMR, said that by making those financial moves, "we have taken the liquidity question off the table."

American said it would add first-class sections to 25 of its Bombardier CRJ-700 regional jets flown by American Eagle, and order 22 more of the 70-seat jets with first-class sections.