The retirement of the promissory note, that was due in September 2001, cost Hawaiian $9.2 million but cleared the amount that the airline owed American for past due aircraft lease and maintenance bills.

After a recapitalization a year ago, which brought in $20 million in new capital, and a stock sale in September that raised another $39 million, Hawaiian has been able to reduce its debt.

Hawaiian said that the payment to American wiped out about half of its remaining long-term debt, excluding its lease obligations.

Last January, Hawaiian made a new arrangement with American's parent company, AMR Corp., in which American accepted Hawaiian's promissory note in full settlement of earlier bills. Hawaiian was to pay off the debt in installments over six years.

Hawaiian leases nine DC-10 wide-body jets from American Airlines and uses them in its Hawaii-mainland and Hawaii-South Pacific service.

Hawaiian went through a bankruptcy reorganization in 1994 and emerged with most of its debt gone but with no working capital. It has since been working on building up its capital and improving operations. The company has reported operating profits for each of the last six quarters.