AMR Corporation (AMR), American Airlines' parent company, said today it has raised $2.9 billion from partners Citigroup (C) and General Electric (GE). And boy, does Fort Worth, Texas-based AMR need that money.

Challenges from swine flu fears to high fuel costs to a global recession have put the entire airline industry in dire straits, and AMR is in rough shape. It lost $390 million in the second quarter of 2009, an improvement over the $1.5 billion it lost in that quarter in 2008 (both numbers include extraordinary items).

Chairman and CEO Gerard Arpey said AMR is selling $1 billion worth of frequent-flyer miles to Citi's credit card arm -- it's the fifth major airline to sell off miles since 2008, according to Bloomberg.

GE Capital Aviation Services, GE's aircraft leasing arm, is lending American $280 million in cash secured by its aircraft, along with $1.6 billion in sale/lease-back financing commitments for Boeing 737s AMR previously ordered. That means AMR is selling the jets back to Boeing, and then leasing them from the manufacturer.

A charitable way of describing the AMR fund-raising would be to say that Arpey is making a bold bet that American will come out of the downturn in stellar shape. A less charitable way would be to say that he is mortgaging the future of his company in a trio of risky transactions. Plans to buy struggling Japan Air for more than $1 billion would only increase this leverage.

Wall Street seems to like the moves. AMR shares were up more than 20 percent in morning trading.

AMR also announced a handful of other significant changes, including a rejiggering of its network that will increase the number of flights in and out of profitable hubs in Dallas-Fort Worth, Chicago, Miami, and New York.

In case you're a local newspaper reporter on a deadline, AMR has just the press release for you, filled with cheery quotes from political officials in all the cities where it's adding flights. But if you're in St. Louis or Raleigh-Durham, where American is cutting back, you're out of luck. Same goes for American employees there -- AMR still isn't sure how many jobs it'll have to shed.


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