AMR Corporation Reports a First Quarter Loss of $162 Million on the Impact of High Fuel Costs

April 20, 2005

American Performing Well in Several Important Areas; Continues Intense Focus

Under the Turnaround Plan to Cut Costs and Increase Revenues

FORT WORTH, Texas, April 20 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR), the parent company of American Airlines, Inc., today reported a net loss of $162 million for the first quarter, or $1.00 per share, which included a benefit of $69 million related to certain excise tax refunds. Without this tax credit, AMR would have recorded a net loss of $230 million, or $1.43 per share. This compares to a loss of $166 million, or $1.03 per share, in the first quarter last year.

"In many ways, the story for the first quarter is very similar to what we have seen the past several quarters," said AMR Chairman and CEO Gerard Arpey. "The combination of extraordinarily high fuel prices and low fares continues to take a heavy financial toll." Arpey pointed out that because of higher fuel prices, excluding the tax credit received this quarter, the company paid $346 million more for fuel during the first quarter of 2005 than it did during the same period the year before.

"On the other hand," Arpey said, "while the financial environment remains very difficult, we are nonetheless performing well in many other important areas. Our employee and aircraft productivity are at historically high levels, more customers are choosing American, and our on-time performance has improved significantly."

American's passenger revenue per available seat mile increased 3.7 percent year over year, to 8.96 cents, driven by strong load factors and a series of network adjustments the airline has implemented in recent months. "We made a number of changes to our network last year," Arpey said, "reducing our overall domestic capacity, strengthening our hubs and adding new international routes, to name a few. And we are starting to see those changes bear fruit in our revenue performance. Regrettably, that silver lining does not come close to offsetting the impact of oil at 50-plus dollars per barrel."

Although American's mainline cost per available seat mile increased 3.3 percent, including the tax credit, and 4.6 percent, excluding the tax credit, Arpey noted that American's success in reigning in costs was illustrated by the 3.2 percent drop in the airline's fuel-neutral unit costs, excluding the tax credit. "Our people continue to do a great job in finding ways to reduce costs," he said. "Their efforts are even more impressive, and more important, when you consider that in addition to much higher fuel costs, we are facing significant upward pressure in airport rents, landing fees, health care -- for both active and retired employees -- and a variety of other areas."

Even in the face of the current fuel and revenue environment, AMR was able to contribute more than $138 million to its various defined benefit pension plans. AMR also was able, during the quarter, to further build on its cash balance, ending the period with a balance in cash and short-term investments of $3.5 billion, including a restricted balance of $483 million.

"American clearly still has a lot of work to do to reach its goal of sustained profitability," Arpey said. "Despite fuel, and despite fares, however, we are making progress. The key to our progress has been -- and will continue to be -- working together to identify the changes necessary to ensure our future."

Arpey pointed to the recently announced initiative to transform American's Maintenance and Engineering Center in Tulsa, Okla., into a future profit center as evidence of what can happen when management, employees and their representatives work together to find creative solutions to the company's challenges. Arpey also noted the joint position taken by the company, on behalf of its employees, and with its labor unions on pension legislative reform as another example of how the company and its unions are addressing key issues as business partners.

"We need to be realistic about the headwinds we are up against," Arpey said. "But even more importantly, we need to remember that by working collaboratively and imaginatively, we will control our own destiny and complete the turnaround we have begun."

Statements in this news release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events. When used in this news release, the words "expects," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook" and similar expressions are intended to identify forward-looking statements. Forward- looking statements include, without limitation, the Company's expectations concerning operations and financial conditions, including changes in capacity, revenues, and costs, future financing plans and needs, overall economic conditions, plans and objectives for future operations, and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact. Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward- looking statement, whether as a result of new information, future events, or otherwise.

Forward-looking statements are subject to a number of risk factors that could cause actual results to differ materially from our expectations. The following factors, in addition to other possible factors not listed, could cause the Company's actual results to differ materially from those expressed in forward-looking statements: changes in economic, business and financial conditions; the Company's substantial indebtedness; continued high fuel prices and the availability of fuel; further increases in the price of fuel; the impact of events in Iraq; conflicts in the Middle East or elsewhere; the highly competitive business environment faced by the Company, with increasing pricing transparency and competition from low cost carriers and financially distressed carriers; historically low fare levels and fare simplification initiatives (both of which could result in a further deterioration of the revenue environment); the ability of the Company to reduce its costs further without adversely affecting operational performance and service levels; uncertainties with respect to the Company's international operations; changes in the Company's business strategy; actions by U.S. or foreign government agencies; the possible occurrence of additional terrorist attacks; another outbreak of a disease (such as SARS) that affects travel behavior; uncertainties with respect to the Company's relationships with unionized and other employee work groups; the ability of the Company to satisfy existing financial or other covenants in certain of its credit agreements; the availability and terms of future financing; the ability of the Company to reach acceptable agreements with third parties; and increased insurance costs and potential reductions of available insurance coverage. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Form 10-K for the year ended Dec. 31, 2004.

    Detailed financial information follows:

                               AMR CORPORATION
                   (in millions, except per share amounts)

                                          Three Months Ended
                                                March 31,         Percent
                                            2005        2004      Change
        Passenger - American Airlines      $3,841      $3,678       4.4
                  - Regional Affiliates       451         420       7.4
        Cargo                                 151         148       2.0
        Other revenues                        307         266      15.4
          Total operating revenues          4,750       4,512       5.3

      Wages, salaries and benefits          1,644       1,640       0.2
      Aircraft fuel                         1,097         808      35.8
      Other rentals and landing fees          300         305      (1.6)
      Depreciation and amortization           290         326     (11.0)
      Commissions, booking fees and
       credit card expense                    271         288      (5.9)
      Maintenance, materials and repairs      235         231       1.7
      Aircraft rentals                        148         153      (3.3)
      Food service                            125         137      (8.8)
      Other operating expenses                617         582       6.0
        Total operating expenses            4,727       4,470       5.7

    Operating Income                           23          42     (45.2)

    Other Income (Expense)
      Interest income                          36          14        *
      Interest expense                       (235)       (212)     10.8
      Interest capitalized                     23          18      27.8
      Miscellaneous - net                      (9)        (28)    (67.9)
                                             (185)       (208)    (11.1)

    Loss Before Income Taxes                 (162)       (166)     (2.4)
    Income tax                                ---         ---       ---
    Net Loss                                $(162)      $(166)     (2.4)

    Basic and Diluted Loss Per Share       $(1.00)     $(1.03)

    Number of Shares Used in Computation
      Basic and Diluted                       161         160

     * Greater than 100%

                               AMR CORPORATION
                             OPERATING STATISTICS

                                           Three Months Ended
                                               March 31,           Percent
                                            2005        2004       Change
    American Airlines, Inc. Mainline
     Jet Operations
        Revenue passenger miles (millions) 32,327      30,290       6.7
        Available seat miles (millions)    42,854      42,597       0.6
        Cargo ton miles (millions)            539         521       3.5
        Passenger load factor                75.4%       71.1%      4.3 pts.
        Passenger revenue yield per
         passenger mile (cents)             11.88       12.14      (2.1)
        Passenger revenue per available
         seat mile (cents)                   8.96        8.64       3.7
        Cargo revenue yield per ton
         mile (cents)                       27.95       28.47      (1.8)
        Operating expenses per available
         seat mile, excluding Regional
         Affiliates (cents) (A)              9.80        9.49       3.3
        Fuel consumption (gallons,
         in millions)                         729         741      (1.6)
        Fuel price per gallon (cents) (B)   136.6       101.0      35.2

    Regional Affiliates
        Revenue passenger miles (millions)  1,885       1,539      22.5
        Available seat miles (millions)     2,916       2,453      18.9
        Passenger load factor                64.7%       62.7%      2.0 pts.

    AMR Corporation
      Average Equivalent Number
       of Employees
        American Airlines                  75,100      79,900
        Other                              13,400      12,100
             Total                         88,500      92,000

     (A)  Excludes $583 million and $487 million of expense incurred related
          to Regional Affiliates in 2005 and 2004, respectively.
     (B)  Includes the 7.5 cents per gallon impact of a $55 million fuel
          excise tax refund in 2005.

                               AMR CORPORATION

     AMR Corporation
     Impact of Tax Credit (in millions,
      except per share amounts)                  Three Months Ended
                                                    March 31, 2005
                                                 Amount          EPS

       Net loss as reported                      $(162)        $(1.00)
       Tax credit                                  (69)         (0.43)
       Loss before tax credit                    $(230)        $(1.43)

Note: The company believes that loss before tax credit is useful to investors as the tax credit relates to prior periods.

     AMR Corporation
     Impact of Fuel Price Variance

         Average fuel price per gallon (cents)
              Three months ended March 31, 2005           137.9
              Three months ended March 31, 2004           101.3
        Change in price (cents)                            36.6
        2005 consumption (gallons, in millions)         x   796
        Impact of fuel price variance (in millions)        $291
        Fuel excise tax refund (in millions)                 55
        Impact of fuel price variance, excluding
         fuel excise tax refund (in millions)              $346

                               AMR CORPORATION

     American Airlines, Inc. Mainline
      Jet Operations                         Three Months Ended March 31,
     (in millions, except as noted)               2005         2004

    Total operating expenses as reported         $4,781       $4,528
    Less: Operating expenses incurred related
     to Regional Affiliates                         583          487
    Less: tax credit                                 55          ---
    Operating expenses, excluding expenses
     incurred related to Regional
     Affiliates and tax credit                   $4,253       $4,041
    American mainline jet operations
     available seat miles                        42,854       42,597
    Operating expenses per available seat
     mile, excluding Regional Affiliates
     and tax credit (cents)                        9.92         9.49

    Percent change                                  4.6

    Operating expenses, excluding expenses
     incurred related to Regional
     Affiliates and tax credit                   $4,253       $4,041
    Less:  Impact of fuel price increase (*)        314          ---
    Operating expenses, excluding expenses
     incurred related to Regional
     Affiliates, tax credit and fuel
     price increase                              $3,939       $4,041
    American mainline jet operations
     available seat miles                        42,854       42,597
    Operating expenses per available seat
     mile, excluding Regional Affiliates,
     tax credit and fuel price
     increase (cents)                              9.19         9.49

    Percent change                                 (3.2)

     (*)  729 million gallons consumed * 43.1 cents price increase (35.6 cents
          plus 7.5 cents tax credit impact)

Note: The company believes that operating expenses per available seat mile, excluding the tax credit and aircraft fuel price increase, assists investors in understanding the impact of fuel prices on the company's operations.

       Current AMR Corp news releases can be accessed via the Internet.
                       The address is
SOURCE  AMR Corporation
    -0-                             04/20/2005
    /EDITORS' ADVISORY:  A live Webcast reporting first quarter results will
be broadcast on the Internet on April 20 at 2 p.m. EDT.  Windows Media Player
required for viewing.
    AMR's Chairman, President and Chief Executive Officer, Gerard Arpey, and
its Chief Financial Officer, James Beer, will make a presentation to analysts
during a teleconference on Wednesday, April 20, from 2 p.m. to 2:45 p.m. EDT.
Following the analyst call, they will hold a question-and-answer conference
call for media from 3 p.m. to 3:45 p.m. EDT.  Reporters interested in
listening to the presentation or participating in the media Q&A should call
    /CONTACT:  Al Becker, Corporate Communications of AMR Corporation,
+1-817-967-1577, or /
    /Web site: /

CO:  AMR Corporation; American Airlines, Inc.
ST:  Texas

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