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After merger, American's cash pile tops $10B

Company formed by merger of American and US Airways sits on $10.3 billion cash stockpile

FORT WORTH, Texas (AP) -- The newly combined American Airlines and US Airways ended last year with $10.3 billion in cash.

American Airlines Group Inc. said in a filing Wednesday with the Securities and Exchange Commission that only about $1 billion of that cash and investments was restricted.

A year earlier, when they were separate companies, American and US Airways had about $7 billion in cash and equivalents including about $1 billion in restricted amounts, according to filings. At the end of September, they had more than $11.5 billion in cash — airlines often generate cash in the busy summer and spend it down in fall and winter.

"A nice problem to have: excess liquidity," said J.P. Morgan analyst Jamie Baker. He wrote in a note to clients that the cash equals about one-fourth of the airlines' revenue over the past 12 months and suggested that American could eventually use cash to pay down debt or reward shareholders.

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The new company, formed by last month's merger, is the world's biggest airline operator. It is expected to report fourth-quarter results in late January. Analysts surveyed by FactSet expect earnings of 52 cents per share on revenue of $9.33 billion.

The company said that American ended 2013 with 622 planes while US Airways had 343. Those figures don't include smaller jets at regional-flying affiliates such as American Eagle.

American Airlines shares slipped 16 cents to $28.71 in afternoon trading.