The Fort Worth-based carrier is leveraging aircraft-backed financing to maintain liquidity levels under fuel-cost pressure.
American Airlines‘ first enhanced equipment trust certificate (EETC) transaction of the year, the 2026-1 notes, will finance or refinance 32 Airbus and Boeing aircraft. The remaining proceeds are earmarked for general corporate purposes, including maintaining liquidity levels.
The new debt comes as airlines face significant cost pressure from the dramatic rise in oil prices since the Iran war began in February. While US airline executives say fare increases and strong demand are covering much of the cost increase, high fuel prices are still putting pressure on balance sheets. American expects a $4 billion year-on-year increase in second-quarter fuel costs.
It is not the only US carrier using its fleet to raise cash. Earlier in April, JetBlue Airways borrowed up to $500 million from SKY Leasing and UMB Bank backed by 22 aircraft.
Fitch Ratings says Monday that American’s credit remains “weak” as elevated fuel costs “pressure profitability and delay deleveraging.”
American has the highest debt levels among major US airlines with $39.4 billion in long-term debt and other liabilities at the end of March. Much of the debt is related to the carrier’s large fleet renewal program in the 2010s.
“The improvements we have made on the balance sheet provide significant flexibility as we navigate the current environment,” said Devon May, the chief financial officer of American, of the airline’s deleveraging efforts on April 23.
Despite a loss in the first quarter, American executives anticipate a full-year profit.
The 2026-1 notes are split into two tranches: the $905 million Class A notes due in 2038 and the $235.8 million Class B notes due in 2035. The initial and maximum loan-to-value ratios are 59.5% and 75%, respectively, for the two tranches.
S&P Global rates both the 2026-1 tranches investment grade, rating the A notes an “A” and the B a “BBB”.
The collateral pool includes six Airbus A321XLRs delivered from July 2025 through July 2026; 12 A321s delivered from October 2013 through November 2015; 11 Boeing 737 Max 8s delivered from January through April 2026; and three Boeing 777-300ERs delivered from April to June 2013. The pool is valued at $1.5 billion.
American maintains the right to add a subordinate Class C tranche to the 2026-1 notes in the future.
Goldman Sachs, MUFG and Morgan Stanley are joint lead bookrunners of the 2026-1 transaction. Joint bookrunners include Bank of America Securities, Barclays, BNP Paribas, Citigroup, Credit Agricole Securities, Deutsche Bank Securities, JP Morgan, SMBC Nikko, Loop Capital Markets, CIBC Capital Markets, ICBC Standard Bank, Miuho, Natixis, NatWest, US Bancorp and BOK Financial Securities. SMBC is the depositary and Natixis the liquidity facility provider.
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