American Airlines is seeking to refinance or replace USD834m of credit in order to be able to better compete with low-cost airlines.

In a filing with the US Securities and Exchange Commission the airline said that it needs extra relief after August 2004 revenues fell short of its expectations. The Texas-based airline is said to have debts totalling USD22bn and needs to increase profit to service the debt.

American Airlines said that its financial results will not reach the requirement in its loan agreement which covers the ratio of its pre-tax earnings to debt payments and that it is seeking to renegotiate the terms of the loan, reports The Associated Press.