CHICAGO, Oct 1 AMR Corp, parent of American Airlines, on Monday said it will prepay $ 545

CHICAGO, Oct 1 (Reuters) AMR Corp, parent of American Airlines, on Monday said it will prepay $545 million in aircraft debt in the fourth quarter in addition to its $1.3 billion in scheduled principal payments in 2007.

The prepayment is expected to initially eliminate about $25 million of annual net interest expense and release 16 aircraft used to secure the debt.

REUTERS DKS KP2037