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                         UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM 10-Q



[X]Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2002.


[  ]Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period From              to      .


Commission file number 1-8400.



                        AMR Corporation
     (Exact name of registrant as specified in its charter)

        Delaware                            75-1825172
    (State or other                      (I.R.S. Employer
      jurisdiction                      Identification No.)
   of incorporation or
     organization)

 4333 Amon Carter Blvd.
   Fort Worth, Texas                           76155
 (Address of principal                      (Zip Code)
   executive offices)

Registrant's telephone number, including area code  (817) 963-1234



                         Not Applicable
(Former name, former address and former fiscal year , if changed
                       since last report)


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes  X     No        .




Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.


Common Stock, $1 par value - 155,688,619 as of July 15, 2002.




 2
                                 INDEX

                            AMR CORPORATION




PART I:   FINANCIAL INFORMATION


Item 1.  Financial Statements

  Consolidated Statements of Operations -- Three and six months ended
  June 30, 2002 and 2001

  Condensed Consolidated Balance Sheets - June 30, 2002 and  December
  31, 2001

  Condensed Consolidated Statements of Cash Flows -- Six months ended
  June 30, 2002 and 2001

  Notes  to  Condensed Consolidated Financial Statements -  June  30,
  2002

Item  2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations

Item 3.  Quantitative and Qualitative Disclosures about Market Risk


PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings

Item 4.  Submission of Matters to a Vote of Security Holders

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURE

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                    PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements

AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In millions, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, 2002 2001 2002 2001 Revenues Passenger - American Airlines $3,747 $4,645 $7,231 $8,580 - AMR Eagle 344 409 649 763 Cargo 142 190 276 366 Other revenues 246 339 459 634 Total operating revenues 4,479 5,583 8,615 10,343 Expenses Wages, salaries and benefits 2,126 2,126 4,206 3,872 Aircraft fuel 656 842 1,183 1,549 Depreciation and amortization 338 352 679 665 Other rentals and landing fees 306 320 595 577 Maintenance, materials and repairs 285 298 551 578 Aircraft rentals 214 226 440 374 Food service 180 218 350 402 Commissions to agents 155 260 316 484 Special charges - 685 - 685 Other operating expenses 820 1,016 1,625 1,921 Total operating expenses 5,080 6,343 9,945 11,107 Operating Loss (601) (760) (1,330) (764) Other Income (Expense) Interest income 18 24 36 64 Interest expense (164) (132) (330) (251) Interest capitalized 22 38 44 79 Miscellaneous - net 5 37 (3) 22 (119) (33) (253) (86) Loss Before Income Taxes (720) (793) (1,583) (850) Income tax benefit (225) (286) (513) (300) Net Loss $ (495) $ (507) $ (1,070) $ (550) Loss Per Share Basic and Diluted $(3.19) $(3.29) $ (6.90) $(3.58)
The accompanying notes are an integral part of these financial statements. 1 4 AMR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited) (In millions)
June 30,2002 December 31,2001 Assets Current Assets Cash $ 195 $ 120 Short-term investments 2,368 2,872 Receivables, net 1,556 1,414 Inventories, net 743 822 Deferred income taxes 792 790 Other current assets 194 522 Total current assets 5,848 6,540 Equipment and Property Flight equipment, net 15,556 14,980 Other equipment and property, net 2,317 2,079 Purchase deposits for flight equipment 686 929 18,559 17,988 Equipment and Property Under Capital Leases Flight equipment, net 1,433 1,572 Other equipment and property, net 92 95 1,525 1,667 Goodwill 1,351 1,392 Route acquisition costs 829 829 Airport operating and gate lease rights, net 481 496 Other assets 4,296 3,929 $ 32,889 $ 32,841 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 1,559 $ 1,785 Accrued liabilities 2,344 2,192 Air traffic liability 3,059 2,763 Current maturities of long-term debt 350 556 Current obligations under capital leases 147 216 Total current liabilities 7,459 7,512 Long-term debt, less current maturities 9,172 8,310 Obligations under capital leases, less current obligations 1,444 1,524 Deferred income taxes 1,940 1,627 Postretirement benefits 2,611 2,538 Other liabilities, deferred gains and deferred credits 5,868 5,957 Stockholders' Equity Preferred stock - - Common stock 182 182 Additional paid-in capital 2,812 2,865 Treasury stock (1,645) (1,716) Accumulated other comprehensive loss (72) (146) Retained earnings 3,118 4,188 4,395 5,373 $ 32,889 $ 32,841
The accompanying notes are an integral part of these financial statements. 2 5 AMR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions)
Six Months Ended June 30, 2002 2001 Net Cash Provided by Operating Activities $ 86 $ 885 Cash Flow from Investing Activities: Capital expenditures, including purchase deposits for flight equipment (1,113) (2,124) Acquisition of Trans World Airlines, Inc. - (742) Net decrease in short-term investments 504 922 Proceeds from sale of equipment and property 162 206 Other 35 (6) Net cash used for investing activities (412) (1,744) Cash Flow from Financing Activities: Payments on long-term debt and capital lease obligations (468) (586) Proceeds from: Issuance of long-term debt 866 1,587 Exercise of stock options 3 34 Net cash provided by financing activities 401 1,035 Net increase in cash 75 176 Cash at beginning of period 120 89 Cash at end of period $ 195 $ 265
The accompanying notes are an integral part of these financial statements. 3 6 AMR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1.The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals and the asset impairment charge as discussed in footnote 8, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. The Company's 2002 results continue to be adversely impacted by the September 11, 2001 terrorist attacks and the resulting effect on the economy and the air transportation industry. In addition, on April 9, 2001, Trans World Airlines LLC (TWA LLC, a wholly owned subsidiary of AMR Corporation) purchased substantially all of the assets and assumed certain liabilities of Trans World Airlines, Inc. (TWA). Accordingly, the operating results of TWA LLC are included in the accompanying condensed consolidated financial statements for the three and six month periods ended June 30, 2002 whereas for 2001 the results of TWA LLC were included only for the period April 10, 2001 through June 30, 2001. When utilized in this report, all references to American Airlines, Inc. include the operations of TWA LLC since April 10, 2001 (collectively, American). Results of operations for the periods presented herein are not necessarily indicative of results of operations for the entire year. For further information, refer to the consolidated financial statements and footnotes thereto included in the AMR Corporation (AMR or the Company) Annual Report on Form 10-K for the year ended December 31, 2001 ("2001 Form 10-K"). 2.Accumulated depreciation of owned equipment and property at June 30, 2002 and December 31, 2001 was $9 billion and $8.9 billion, respectively. Accumulated amortization of equipment and property under capital leases at June 30, 2002 and December 31, 2001 was approximately $1.1 billion and $1.2 billion, respectively. 3.The following table provides unaudited pro forma consolidated results of operations, assuming the acquisition of TWA had occurred as of January 1, 2001 (in millions, except per share amounts): Six Months Ended June 30, 2001 Operating revenues $ 11,210 Net loss (557) Loss per share $ (3.62) The unaudited pro forma consolidated results of operations have been prepared for comparative purposes only. These amounts are not indicative of the combined results that would have occurred had the transaction actually been consummated on the date indicated above and are not indicative of the consolidated results of operations which may occur in the future. 4.As discussed in the notes to the consolidated financial statements included in the Company's 2001 Form 10-K, Miami-Dade County (the County) is currently investigating and remediating various environmental conditions at the Miami International Airport (MIA) and funding the remediation costs through landing fees and various cost recovery methods. American and AMR Eagle have been named as potentially responsible parties (PRPs) for the contamination at MIA. During the second quarter of 2001, the County filed a lawsuit against 17 defendants, including American, in an attempt to recover its past and future cleanup costs (Miami-Dade County, Florida v. Advance Cargo Services, Inc., et al. in the Florida Circuit Court). In addition to the 17 defendants named in the lawsuit, 243 other agencies and companies were also named as PRPs and contributors to the contamination. American's and AMR Eagle's portion of the cleanup costs cannot be reasonably estimated due to various factors, including the unknown extent of the remedial actions that may be required, the proportion of the cost that will ultimately be recovered from the responsible parties, and uncertainties regarding the environmental agencies that will ultimately supervise the remedial activities and the nature of that supervision. 4 7 AMR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (Unaudited) In addition, the Company is subject to environmental issues at various other airport and non-airport locations. Management believes, after considering a number of factors, that the ultimate disposition of these environmental issues is not expected to materially affect the Company's consolidated financial position, results of operations or cash flows. Amounts recorded for environmental issues are based on the Company's current assessments of the ultimate outcome and, accordingly, could increase or decrease as these assessments change. 5.As of June 30, 2002, the Company had commitments to acquire the following aircraft: 47 Boeing 737-800s, 11 Boeing 777-200ERs, nine Boeing 767-300ERs, 109 Embraer regional jets and 20 Bombardier CRJ- 700s. Deliveries of these aircraft are scheduled to continue through 2008. Payments for these aircraft are expected to be approximately $505 million during the remainder of 2002, $1.5 billion in 2003, $1.1 billion in 2004 and an aggregate of approximately $2.1 billion in 2005 through 2008. 6.During the six month period ended June 30, 2002, American and AMR Eagle borrowed approximately $626 million under various debt agreements which are secured by aircraft. Effective interest rates on these agreements are based on London Interbank Offered Rate plus a spread and mature over various periods of time through 2018. In March 2002, the Regional Airports Improvement Corporation issued facilities sublease revenue bonds at the Los Angeles International Airport to provide reimbursement to American for certain facility construction costs. The proceeds of approximately $225 million provided to American have been recorded as long-term debt on the condensed consolidated balance sheets. These obligations bear interest at fixed rates, with an average rate of 7.88 percent, and mature over various periods of time, with a final maturity in 2024. 7.Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended (SFAS 133). SFAS 133 required the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings. The adoption of SFAS 133 did not result in a cumulative effect adjustment being recorded to net income for the change in accounting. However, the Company recorded a transition adjustment of approximately $64 million in Accumulated other comprehensive loss in the first quarter of 2001. In addition, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 142 requires the Company to test goodwill and indefinite-lived intangible assets (for AMR, route acquisition costs) for impairment rather than amortize them. During the first quarter of 2002, the Company completed its impairment analysis for route acquisition costs in accordance with SFAS 142. The analysis did not result in an impairment charge. During the second quarter of 2002, the Company completed the first step of its impairment analysis related to its $1.4 billion of goodwill and determined the Company's net book value to be in excess of the Company's fair market value at January 1, 2002, using AMR as the reporting unit for purposes of the fair value determination. As a result, the Company is in the process of completing the second step of the impairment analysis which will allocate the newly determined fair value of AMR to each of its assets and liabilities. This allocation is expected to be completed during the third or fourth quarter of 2002 and will likely result in the Company recording a one-time, non-cash pre-tax charge of up to $1.4 billion to write-down AMR's goodwill. Such charge would be nonoperational in nature and would be reflected as a cumulative effect of an accounting change in the consolidated statements of operations. 5 8 AMR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (Unaudited) The following table provides information relating to the Company's amortized intangible assets as of June 30, 2002 (in millions): Accumulated Net Book Cost Amortization Value Amortized intangible assets: Airport operating rights $ 516 $ 168 $ 348 Gate lease rights 209 76 133 Total $ 725 $ 244 $ 481 Airport operating and gate lease rights are being amortized on a straight-line basis over 25 years to a zero residual value. For the three and six month period ended June 30, 2002, the Company recorded amortization expense of approximately $6 million and $15 million, respectively, related to these intangible assets. The Company expects to record annual amortization expense of approximately $29 million in each of the next five years related to these intangible assets. The pro forma effect of discontinuing amortization of goodwill and route acquisition costs under SFAS 142 - assuming the Company had adopted this standard as of January 1, 2001 - results in an adjusted net loss of approximately $494 million, or $3.21 per share, and approximately $530 million, or $3.45 per share, respectively, for the three and six month periods ended June 30, 2001. 8.In conjunction with the acquisition of certain assets from TWA, coupled with revisions to the Company's fleet plan to accelerate the retirement dates of its Fokker 100, Saab 340 and ATR 42 aircraft, during the second quarter of 2001 the Company determined these aircraft were impaired under Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" (SFAS 121). As a result, during the second quarter of 2001, the Company recorded an asset impairment charge of approximately $685 million relating to the write-down of the carrying value of 71 Fokker 100 aircraft, 74 Saab 340 aircraft and 20 ATR 42 aircraft and related rotables to their estimated fair market values which is included in Special charges on the accompanying consolidated statements of operations. Management estimated the undiscounted future cash flows utilizing models used by the Company in making fleet and scheduling decisions. In determining the fair market value of these aircraft, the Company considered outside third party appraisals and recent transactions involving sales of similar aircraft. As a result of the writedown of these aircraft to fair market value, as well as the acceleration of the retirement dates and changes in salvage values, depreciation and amortization will decrease by approximately $18 million on an annualized basis. 9.The Company includes unrealized gains and losses on available-for- sale securities, changes in minimum pension liabilities and changes in the fair value of certain derivative financial instruments that qualify for hedge accounting in comprehensive loss. For the three months ended June 30, 2002 and 2001, comprehensive loss was $496 million and $511 million, respectively. In addition, for the six months ended June 30, 2002 and 2001, comprehensive loss was $996 million and $480 million, respectively. The difference between net loss and comprehensive loss is due primarily to the accounting for the Company's derivative financial instruments under SFAS 133. In addition, the six month period ended June 30, 2001 includes the cumulative effect of the adoption of SFAS 133. During the second quarter of 2002, the Company discontinued entering into new foreign exchange currency put option agreements. The fair value of the Company's remaining foreign currency put option agreements was not material as of June 30, 2002, and all of these agreements will expire by September 30, 2002. 6 9 AMR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (Unaudited) 10.The following table sets forth the computations of basic and diluted loss per share (in millions, except per share data): Three Months Ended Six Months Ended June 30, June 30, 2002 2001 2002 2001 Numerator: Net loss - numerator for basic and diluted loss per share $ (495) $(507) $(1,070) $(550) Denominator: Denominator for basic and diluted loss per share - weighted-average shares 155 154 155 154 Basic and diluted loss per share $(3.19) $(3.29) $(6.90) $(3.58) For the three and six months ended June 30, 2002, approximately five million and seven million potential dilutive shares, respectively, were not added to the denominator because inclusion of such shares would be antidilutive as compared to approximately 14 million shares for the three and six months ended June 30, 2001. 7 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS For the Three Months Ended June 30, 2002 and 2001 Summary AMR Corporation's (AMR or the Company) net loss during the second quarter of 2002 was $495 million, or $3.19 per share, as compared to a net loss of $507 million, or $3.29 per share for the same period in 2001. AMR's operating loss of $601 million decreased by $159 million compared to the same period in 2001. The Company's 2002 results continue to be adversely impacted by the September 11, 2001 terrorist attacks and the resulting effect on the economy and the air transportation industry. On April 9, 2001, Trans World Airlines LLC (TWA LLC, a wholly owned subsidiary of AMR) purchased substantially all of the assets and assumed certain liabilities of Trans World Airlines, Inc. (TWA). Accordingly, the operating results of TWA LLC are included in the accompanying condensed consolidated financial statements for the three month period ended June 30, 2002 whereas for 2001 the results of TWA LLC were included only for the period April 10, 2001 through June 30, 2001. All references to American Airlines, Inc. include the operations of TWA LLC since April 10, 2001 (collectively, American). AMR's second quarter 2001 results include: (i) a $685 million charge ($430 million after-tax, or $2.79 per share) related to the writedown of the carrying value of its Fokker 100, Saab 340 and ATR-42 aircraft and related rotables in accordance with SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (see footnote 8 to the condensed consolidated financial statements), and (ii) a $45 million gain ($29 million after-tax, or $0.19 per share) from the settlement of a legal matter related to the Company's 1999 labor disruption. Although traffic has continued to increase on significantly reduced capacity since the events of September 11, 2001, the Company's second quarter 2002 revenues were down significantly quarter-over-quarter. In addition to the residual effects of September 11, the Company's revenues continue to be negatively impacted by the economic slowdown, seen largely in business travel declines, the geographic distribution of the Company's network and reduced fares. In total, the Company's revenues decreased $1,104 million, or 19.8 percent, in the second quarter of 2002 as compared to the same period last year. American's passenger revenues decreased by 19.3 percent, or $898 million in the second quarter of 2002 from the same period in 2001. American's domestic revenue per available seat mile (RASM) decreased 11.9 percent, to 8.47 cents, on a capacity decrease of 8 percent, to 32 billion available seat miles (ASMs). International RASM decreased to 8.67 cents, or 5 percent, on a capacity decrease of 16.2 percent. The decrease in international RASM was due to an 8.6 percent and 3.1 percent decrease in Latin American and European RASM, respectively, slightly offset by a 3.2 percent increase in Pacific RASM. The decrease in international capacity was driven by a 33.9 percent, 16.2 percent and 12.3 percent reduction in Pacific, European and Latin American ASMs, respectively. AMR Eagle's passenger revenues decreased 15.9 percent, or $65 million. AMR Eagle's traffic increased 2.8 percent while capacity decreased 5 percent, to approximately 1.6 billion ASMs. As with American, the decrease in AMR Eagle's revenues was due primarily to the continued impact of the September 11, 2001 terrorist attacks and the economic slowdown. Cargo revenues decreased $48 million, or 25.3 percent, primarily due to the same reasons as noted above. Other revenues decreased 27.4 percent, or $93 million, due primarily to decreases in contract maintenance work that American performs for other airlines, and decreases in codeshare revenue and employee travel service charges. 8 11 RESULTS OF OPERATIONS (Continued) The Company's operating expenses decreased 19.9 percent, or $1,263 million. American's cost per ASM increased 0.5 percent to 10.78 cents, excluding the impact of the second quarter 2001 asset impairment charge. Wages, salaries and benefits remained flat quarter- over-quarter, reflecting (i) a decrease in the average number of equivalent employees, somewhat offset by higher salaries, and (ii) increases in the Company's pension and health insurance costs, the latter reflecting rapidly rising medical care and prescription drug costs. Aircraft fuel expense decreased 22.1 percent, or $186 million, due primarily to an 11.6 percent decrease in the Company's fuel consumption and a 9.4 percent decrease in the Company's average price per gallon of fuel. Food service decreased 17.4 percent, or $38 million, due primarily to the Company's reduced operating schedule and change in level of food service. Commissions to agents decreased 40.4 percent, or $105 million, due primarily to a 19.1 percent decrease in passenger revenues and commission structure changes implemented in March 2002. Special charges of $685 million related to the writedown of the carrying value of the Company's Fokker 100, Saab 340 and ATR-42 aircraft and related rotables during the second quarter of 2001 (see footnote 8 to the condensed consolidated financial statements). Other operating expenses decreased 19.3 percent, or $196 million, due primarily to decreases in contract maintenance work that American performs for other airlines, and decreases in travel and incidental costs, credit card and booking fees, advertising and promotion costs, and data processing expenses, which were partially offset by higher insurance and security costs. Other income (expense) increased $86 million due to the following: Interest income decreased 25 percent, or $6 million, due primarily to decreases in interest rates. Interest expense increased $32 million, or 24.2 percent, resulting primarily from the increase in the Company's long-term debt. Interest capitalized decreased $16 million, or 42.1 percent, due primarily to a decrease in purchase deposits for flight equipment. Miscellaneous-net decreased 86.5 percent, or $32 million, due primarily to a $45 million gain recorded during the second quarter of 2001 from the settlement of a legal matter related to the Company's 1999 labor disruption. The effective tax rate for the three months ended June 30, 2002 was impacted by a $30 million charge resulting from a provision in Congress' economic stimulus package that changes the period for carrybacks of net operating losses (NOLs). This change allows the Company to carry back 2001 and 2002 NOLs for five years, rather than two years under the existing law, allowing the Company to more quickly recover its NOLs. The extended NOL carryback did however, result in the displacement of foreign tax credits taken in prior years. These credits are now expected to expire before being utilized by the Company, resulting in this charge. 9 12 RESULTS OF OPERATIONS (Continued)
OPERATING STATISTICS Three Months Ended June 30, 2002 2001 American Airlines Revenue passenger miles (millions) 31,379 35,188 Available seat miles (millions) 43,958 49,044 Cargo ton miles (millions) 518 610 Passenger load factor 71.4% 71.7% Breakeven load factor (*) 86.4% 74.0% Passenger revenue yield per passenger mile (cents) 11.94 13.20 Passenger revenue per available seat mile (cents) 8.52 9.47 Cargo revenue yield per ton mile (cents) 27.21 30.89 Operating expenses per available seat mile (cents)(*) 10.78 10.73 Fuel consumption (gallons, in millions) 808 922 Fuel price per gallon (cents) 75.5 83.3 Fuel price per gallon, excluding fuel taxes (cents) 70.0 78.0 Operating aircraft at period-end 828 904 AMR Eagle Revenue passenger miles (millions) 1,059 1,030 Available seat miles (millions) 1,596 1,680 Passenger load factor 66.4% 61.3% Operating aircraft at period-end 281 271
(*) Excludes the impact of Special charges Operating aircraft at June 30, 2002, included:
American Airlines Aircraft AMR Eagle Aircraft Airbus A300-600R 34 ATR 42 28 Boeing 737-800 77 Bombardier CRJ-700 5 Boeing 757-200 151 Embraer 135 40 Boeing 767-200 8 Embraer 140 30 Boeing 767-200 Extended Range 21 Embraer 145 56 Boeing 767-300 Extended Range 58 Super ATR 42 Boeing 777-200 Extended Range 43 Saab 340B 55 Fokker 100 74 Saab 340B Plus 25 McDonnell Douglas MD-80 362 Total 281 Total 828
The average aircraft age for American's aircraft is 10 years and 6.6 years for AMR Eagle aircraft. In addition, the following owned and leased aircraft were not operated by the Company as of June 30, 2002: 29 owned Boeing 727-200s, 24 operating leased Boeing 717-200s, 13 operating leased McDonnell Douglas DC-9s, eight owned McDonnell Douglas DC-10-10s, four operating leased McDonnell Douglas MD-80s, and 15 capital leased and two owned Saab 340Bs. 10 13 RESULTS OF OPERATIONS (Continued) For the Six Months Ended June 30, 2002 and 2001 Summary AMR's net loss for the six months ended June 30, 2002 was $1,070 million, or $6.90 per share, as compared to a net loss of $550 million, or $3.58 per share, for the same period in 2001. AMR's operating loss for the six months ended June 30, 2002 was $1,330 million, compared to an operating loss of $764 million for the same period in 2001. The Company's 2002 results continue to be adversely impacted by the September 11, 2001 terrorist attacks and the resulting effect on the economy and the air transportation industry. On April 9, 2001, TWA LLC purchased substantially all of the assets and assumed certain liabilities of TWA. Accordingly, the operating results of TWA LLC are included in the accompanying condensed consolidated financial statements for the six month period ended June 30, 2002 whereas for 2001 the results of TWA LLC were included only for the period April 10, 2001 through June 30, 2001. In addition, AMR's 2001 results include: (i) a $685 million charge ($430 million after-tax, or $2.79 per share) related to the writedown of the carrying value of its Fokker 100, Saab 340 and ATR-42 aircraft and related rotables, and (ii) a $45 million gain ($29 million after-tax, or $0.19 per share) from the settlement of a legal matter related to the Company's 1999 labor disruption. Although traffic has continued to increase on significantly reduced capacity since the events of September 11, 2001, the Company's 2002 revenues were down significantly year-over-year. In addition to the residual effects of September 11, the Company's revenues continue to be negatively impacted by the economic slowdown, seen largely in business travel declines, the geographic distribution of the Company's network and reduced fares. In total, the Company's revenues decreased $1,728 million, or 16.7 percent, in 2002 versus the same period in 2001. American's passenger revenues decreased by 15.7 percent, or $1,349 million in 2002 as compared to the same period in 2001. American's domestic RASM decreased 13.4 percent, to 8.58 cents, on a capacity decrease of 0.4 percent, to 61.3 billion ASMs. International RASM decreased to 8.67 cents, or 7.7 percent, on a capacity decrease of 14 percent. The decrease in international RASM was due to a 10.2 percent and 7.9 percent decrease in Latin American and European RASM, respectively, slightly offset by a 5.6 percent increase in Pacific RASM. The decrease in international capacity was driven by a 36.4 percent, 15.2 percent and 8.2 percent reduction in Pacific, European and Latin American ASMs, respectively. AMR Eagle's passenger revenues decreased 14.9 percent, or $114 million. AMR Eagle's traffic increased 4.7 percent while capacity decreased 3.2 percent, to approximately 3.2 billion ASMs. As with American, the decrease in AMR Eagle's revenues was due primarily to the continued impact of the September 11, 2001 terrorist attacks and the economic slowdown. Cargo revenues decreased $90 million, or 24.6 percent, primarily due to the same reasons as noted above. Other revenues decreased 27.6 percent, or $175 million, due primarily to decreases in contract maintenance work that American performs for other airlines, and decreases in codeshare revenue and employee travel service charges. 11 14 RESULTS OF OPERATIONS (Continued) The Company's operating expenses decreased 10.5 percent, or approximately $1,162 million. American's cost per ASM increased by 0.5 percent to 11.03 cents, excluding the impact of the second quarter 2001 asset impairment charge. Wages, salaries and benefits increased 8.6 percent, or $334 million, reflecting (i) a decrease in the average number of equivalent employees, somewhat offset by higher average salaries, and (ii) increases in the Company's pension and health insurance costs, the latter reflecting rapidly rising medical care and prescription drug costs. Aircraft fuel expense decreased 23.6 percent, or $366 million, due primarily to a 16.1 percent decrease in the Company's average price per gallon of fuel and a 6.1 percent decrease in the Company's fuel consumption. Aircraft rentals increased $66 million, or 17.6 percent, due primarily the addition of TWA aircraft. Food service decreased 12.9 percent, or $52 million, due primarily to the Company's reduced operating schedule and change in level of food service. Commissions to agents decreased 34.7 percent, or $168 million, due primarily to a 15.7 percent decrease in passenger revenues and commission structure changes implemented in March 2002. Special charges of $685 million related to the writedown of the carrying value of the Company's Fokker 100, Saab 340 and ATR-42 aircraft and related rotables during the second quarter of 2001. Other operating expenses decreased 15.4 percent, or $296 million, due primarily to decreases in contract maintenance work that American performs for other airlines, and decreases in travel and incidental costs, credit card and booking fees, advertising and promotion costs, and data processing expenses, which were partially offset by higher insurance and security costs. Other income (expense) increased $167 million due to the following: Interest income decreased 43.8 percent, or $28 million, due primarily to decreases in interest rates. Interest expense increased $79 million, or 31.5 percent, resulting primarily from the increase in the Company's long-term debt. Interest capitalized decreased $35 million, or 44.3 percent, due primarily to a decrease in purchase deposits for flight equipment. Miscellaneous-net decreased $25 million due primarily to a $45 million gain recorded during the second quarter of 2001 from the settlement of a legal matter related to the Company's 1999 labor disruption and the write-down of certain investments held by the Company during the first quarter of 2001. The effective tax rate for the six months ended June 30, 2002 was impacted by a $57 million charge resulting from a provision in Congress' economic stimulus package that changes the period for carrybacks of NOLs. This change allows the Company to carry back 2001 and 2002 NOLs for five years, rather than two years under the existing law, allowing the Company to more quickly recover its NOLs. The extended NOL carryback did however, result in the displacement of foreign tax credits taken in prior years. These credits are now expected to expire before being utilized by the Company, resulting in this charge. 12 15 RESULTS OF OPERATIONS (Continued)
OPERATING STATISTICS Six Months Ended June 30, 2002 2001 American Airlines Revenue passenger miles (millions) 59,197 61,640 Available seat miles (millions) 84,047 88,021 Cargo ton miles (millions) 981 1,159 Passenger load factor 70.4% 70.0% Breakeven load factor (*) 86.9% 71.3% Passenger revenue yield per passenger mile (cents) 12.22 13.92 Passenger revenue per available seat mile (cents) 8.60 9.75 Cargo revenue yield per ton mile (cents) 27.93 31.27 Operating expenses per available seat mile (cents)(*) 11.03 10.97 Fuel consumption (gallons, in millions) 1,553 1,664 Fuel price per gallon (cents) 71.5 85.2 Fuel price per gallon, excluding fuel taxes (cents) 66.0 79.8 AMR Eagle Revenue passenger miles (millions) 1,978 1,890 Available seat miles (millions) 3,163 3,268 Passenger load factor 62.5% 57.8%
(*) Excludes the impact of Special charges LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities in the six month period ended June 30, 2002 was $86 million, a decrease of $799 million over the same period in 2001, due primarily to an increase in the Company's net loss. Included in net cash provided by operating activities during the first six months of 2002 was approximately $658 million received by the Company as a result of the utilization of its 2001 NOL's. Capital expenditures for the first six months of 2002 were $1,113 million, and included the acquisition of seven Boeing 757-200s, three Boeing 777-200ERs, 15 Embraer 140s and four Bombardier CRJ-700 aircraft. These capital expenditures were financed primarily through secured mortgage and debt agreements. Proceeds from the sale of equipment and property of $162 million include the proceeds received upon delivery of three McDonnell Douglas MD-11 aircraft to FedEx. As of June 30, 2002, the Company had commitments to acquire the following aircraft: 47 Boeing 737-800s, 11 Boeing 777-200ERs, nine Boeing 767-300ERs, 109 Embraer regional jets and 20 Bombardier CRJ- 700s. Deliveries of these aircraft are scheduled to continue through 2008. Payments for these aircraft are expected to be approximately $505 million during the remainder of 2002, $1.5 billion in 2003, $1.1 billion in 2004 and an aggregate of approximately $2.1 billion in 2005 through 2008. In June 2002, Standard & Poor's downgraded the credit ratings of AMR and American, and the credit ratings of a number of other major airlines. The long-term credit ratings of AMR and American were removed from Standand & Poor's Credit Watch with negative implications and were given a negative outlook. Any additional reductions in AMR's or American's credit ratings could result in increased borrowing costs to the Company and might limit the availability of future financing needs. 13 16 In addition to the Company's approximately $2.6 billion in cash and short-term investments as of June 30, 2002, the Company has available a variety of future financing sources, including, but not limited to: (i) the receipt of the remainder of the U.S. Government grant authorized by the Air Transportation Safety and System Stabilization Act (the Act), which is estimated to be in excess of $40 million, (ii) additional secured aircraft debt, (iii) the availability of the Company's $1 billion credit facility, (iv) sale-leaseback transactions of owned property, including aircraft and real estate, (v) the recovery of past federal income taxes paid as a result of a provision in the recently passed economic stimulus package regarding NOL carrybacks, (vi) tax-exempt borrowings for airport facilities, (vii) securitization of future operating receipts, and (viii) unsecured borrowings. No assurance can be given that any of these financing sources will be available on terms acceptable to the Company. However, the Company believes it will meet its current financing needs. Pursuant to the Act, the Government made available to air carriers, subject to certain conditions, up to $10 billion in federal government guarantees of certain loans. American did not seek such loan guarantees. OTHER INFORMATION As a result of the September 11, 2001 events, aviation insurers have significantly reduced the maximum amount of insurance coverage available to commercial air carriers for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events (war-risk coverage). At the same time, they significantly increased the premiums for such coverage as well as for aviation insurance in general. Pursuant to authority granted in the Act, the Government has supplemented the commercial war- risk insurance until August 17, 2002 with a third party liability policy to cover losses to persons other than employees or passengers for renewable 60-day periods. In the event the insurance carriers reduce further the amount of insurance coverage available or the Government fails to renew war-risk insurance, the Company's operations and/or financial position, results of operations or cash flows would be adversely impacted. As discussed in the Company's 2001 Form 10-K, a provision in the current Allied Pilots Association (APA) contract freezes the number of ASMs and block hours flown on American's two letter marketing code by American's regional carrier partners when American pilots are on furlough (the ASM cap). As AMR Eagle continues to accept previously ordered regional jets, this ASM cap would be reached sometime in 2002, necessitating actions to insure compliance with the ASM cap. American is working with its regional partners to accomplish this. Actions currently being taken and considered by AMR Eagle to reduce its capacity are discussed in the Company's 2001 Form 10-K. In addition, American is removing its code from flights of the AmericanConnection carriers, which are independent carriers that provide feed to American's St. Louis hub. American believes that the combination of these actions will enable it to comply with this ASM cap through 2002 and for sometime beyond. In addition, another provision in the current APA contract limits the total number of regional jets with more than 44 seats flown under the American code by American's regional carrier partners to 67 aircraft. Similar to the above, as AMR Eagle continues to accept previously ordered Bombardier CRJ aircraft, this cap would be reached in early 2003. In order to ensure American remains in compliance with this provision, AMR Eagle has reached an agreement in principle to dispose of 14 Embraer 145 aircraft. Ultimately, these airplanes will be acquired by Trans States Airlines, an AmericanConnection carrier. Trans States Airlines will operate these aircraft under its two letter airline code and expects to deploy these aircraft at its St. Louis hub where it feeds American. The potential transaction still requires the consent of certain third parties, including the companies financing these aircraft, and is subject to the negotiation of final documentation. Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 142 requires the Company to test goodwill and indefinite-lived intangible assets (for AMR, route acquisition costs) for impairment rather than amortize them. During the first quarter of 2002, the Company completed its impairment analysis for route acquisition costs in accordance with SFAS 142. The analysis did not result in an impairment charge. During the second quarter of 2002, the Company completed the first step of its impairment analysis related to its $1.4 billion of goodwill and determined the Company's net book value to be in excess of the Company's fair market value at January 1, 2002, using AMR as the reporting unit for purposes of the fair value determination. As a result, the Company is in the process of completing the second step of the impairment analysis which will allocate the newly determined fair value of AMR to each of its assets and liabilities. This allocation is expected to be completed during the third or fourth quarter of 2002 and will likely result in the Company recording a one-time, non-cash pre-tax charge of up to $1.4 billion to write-down AMR's goodwill. Such charge would be nonoperational in nature and would be reflected as a cumulative effect of an accounting change in the consolidated statements of operations. 14 17 OUTLOOK Capacity for American is expected to be down approximately two percent in the third quarter of 2002 compared to last year's third quarter levels. AMR Eagle's third quarter capacity will be down about one percent from last year's levels. For the third quarter of 2002, the Company expects traffic to be about flat as compared to last year's third quarter levels. Pressure to reduce costs will continue, although the Company will continue to see higher benefit and security costs, increased insurance premiums, and greater interest expense. However, the Company expects to see a slight decrease in fuel prices as compared to the third quarter of 2001 and the continued decline in commission expense due to the commission changes implemented earlier in 2002. In total, American's unit costs, excluding special charges, for the third quarter of 2002 are expected to be down approximately 3.5 percent from last year's third quarter level. Notwithstanding the expected decrease in unit costs however, given the revenue pressures seen in the first half of the year and expected to continue into the third quarter, the Company expects to incur a sizable loss in the third quarter and a significant loss for 2002. In response to these financial challenges, the Company has undertaken a comprehensive review of its business to better align its cost structure with the current revenue environment, aimed at improving productivity, simplifying operations and reducing costs. The Company has begun to implement certain of these changes, including a fleet simplification program, adjustments to its operating schedule and increased airport automation, and will continue to refine its business throughout the coming months. FORWARD-LOOKING INFORMATION Statements in this report 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 document and in documents incorporated herein by reference, the words "expects," "plans," "anticipates," "believes," and similar expressions are intended to identify forward-looking statements. 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 report are based upon information available to the Company on the date of this report. 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 factors that could cause actual results to differ materially from our expectations. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the 2001 Form 10-K. Item 3. Quantitative and Qualitative Disclosures about Market Risk There have been no material changes in market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of the 2001 Form 10-K. 15 18 PART II: OTHER INFORMATION Item 1. Legal Proceedings On July 26, 1999, a class action lawsuit was filed, and in November 1999 an amended complaint was filed, against AMR Corporation, American Airlines, Inc., AMR Eagle Holding Corporation, Airlines Reporting Corporation, and the Sabre Group Holdings, Inc. in the United States District Court for the Central District of California, Western Division (Westways World Travel, Inc. v. AMR Corp., et al.). The lawsuit alleges that requiring travel agencies to pay debit memos to American for violations of American's fare rules (by customers of the agencies) (1) breaches the Agent Reporting Agreement between American and AMR Eagle and the plaintiffs, (2) constitutes unjust enrichment, and (3) violates the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO). The as yet uncertified class includes all travel agencies who have been or will be required to pay monies to American for debit memos for fare rules violations from July 26, 1995 to the present. The plaintiffs seek to enjoin American from enforcing the pricing rules in question and to recover the amounts paid for debit memos, plus treble damages, attorneys' fees, and costs. The Company intends to vigorously defend the lawsuit. Although the Company believes that the litigation is without merit, an adverse court decision could impose restrictions on the Company's relationships with travel agencies which restrictions could have an adverse impact on the Company. On May 13, 1999, the United States (through the Antitrust Division of the Department of Justice) sued AMR Corporation, American Airlines, Inc., and AMR Eagle Holding Corporation in federal court in Wichita, Kansas. The lawsuit alleges that American unlawfully monopolized or attempted to monopolize airline passenger service to and from Dallas/Fort Worth International Airport (DFW) by increasing service when new competitors began flying to DFW, and by matching these new competitors' fares. The Department of Justice seeks to enjoin American from engaging in the alleged improper conduct and to impose restraints on American to remedy the alleged effects of its past conduct. On April 27, 2001, the U.S. District Court for the District of Kansas granted American's motion for summary judgment. On June 26, 2001, the U.S. Department of Justice appealed the granting of American's motion for summary judgment. The parties have submitted briefs to the 10th Circuit Court of Appeals, which has scheduled the case for oral argument on September 23, 2002. The Company intends to defend the lawsuit vigorously. A final adverse court decision imposing restrictions on the Company's ability to respond to competitors would have an adverse impact on the Company. Between May 14, 1999 and June 7, 1999, seven class action lawsuits were filed against AMR Corporation, American Airlines, Inc., and AMR Eagle Holding Corporation in the United States District Court in Wichita, Kansas seeking treble damages under federal and state antitrust laws, as well as injunctive relief and attorneys' fees (King v. AMR Corp., et al.; Smith v. AMR Corp., et al.; Team Electric v. AMR Corp., et al.; Warren v. AMR Corp., et al.; Whittier v. AMR Corp., et al.; Wright v. AMR Corp., et al.; and Youngdahl v. AMR Corp., et al.). Collectively, these lawsuits allege that American unlawfully monopolized or attempted to monopolize airline passenger service to and from DFW by increasing service when new competitors began flying to DFW, and by matching these new competitors' fares. Two of the suits (Smith and Wright) also allege that American unlawfully monopolized or attempted to monopolize airline passenger service to and from DFW by offering discounted fares to corporate purchasers, by offering a frequent flyer program, by imposing certain conditions on the use and availability of certain fares, and by offering override commissions to travel agents. The suits propose to certify several classes of consumers, the broadest of which is all persons who purchased tickets for air travel on American into or out of DFW from 1995 to the present. On November 10, 1999, the District Court stayed all of these actions pending developments in the case brought by the Department of Justice. As a result, to date no class has been certified. The Company intends to defend these lawsuits vigorously. One or more final adverse court decisions imposing restrictions on the Company's ability to respond to competitors or awarding substantial money damages would have an adverse impact on the Company. On May 17, 2002, the named plaintiffs in Hall, et al. v. United Airlines, et al., No. 7:00 CV 123-BR(1), pending in the United States District Court for the Eastern District of North Carolina, filed an amended complaint alleging that between 1995 and the present, American and the other defendant airlines conspired to reduce commissions paid to U.S.-based travel agents in violation of Section 1 of the Sherman Act. The named plaintiffs seek to certify a nationwide class of travel agents, but no class has yet been certified. American is vigorously defending the lawsuit. Trial is set for April 29, 2003. A final adverse court decision awarding substantial money damages or placing restrictions on the Company's commission policies or practices would have an adverse impact on the Company. 16 19 Item 1. Legal Proceedings (Continued) On April 26, 2002, six travel agencies filed an action in the United States District Court for the Central District of California against American, United Air Lines, Delta Air Lines, and Orbitz, LLC, alleging that American and the other defendants: (i) conspired to prevent travel agents from acting as effective competitors in the distribution of airline tickets to passengers in violation of Section 1 of the Sherman Act; and (ii) conspired to monopolize the distribution of common carrier air travel between airports in the United States in violation of Section 2 of the Sherman Act. The named plaintiffs seek to certify a nationwide class of travel agents, but no class has yet been certified. American is vigorously defending the lawsuit, which is styled Albany Travel Co., et al. v. Orbitz, LLC, et al., No. 02- 3459 (ER) (AJW)x. A final adverse court decision awarding substantial money damages or placing restrictions on the Company's distribution practices would have an adverse impact on the Company. On May 13, 2002, the named plaintiffs in Always Travel, et. al. v. Air Canada, et. al., No. T757-027, pending in the Federal Court of Canada, Trial Division, Montreal, filed a statement of claim alleging that between 1995 and the present, American, the other defendant airlines, and the International Air Transport Association conspired to reduce commissions paid to Canada-based travel agents in violation of Section 45 of the Competition Act of Canada. The named plaintiffs seek to certify a nationwide class of travel agents, but no class has yet been certified. American is vigorously defending the lawsuit. A final adverse court decision awarding substantial money damages or placing restrictions on the Company's commission policies would have an adverse impact on the Company. Miami-Dade County (the County) is currently investigating and remediating various environmental conditions at the Miami International Airport (MIA) and funding the remediation costs through landing fees and various cost recovery methods. American Airlines, Inc. and AMR Eagle have been named as potentially responsible parties (PRPs) for the contamination at MIA. During the second quarter of 2001, the County filed a lawsuit against 17 defendants, including American Airlines, Inc., in an attempt to recover its past and future cleanup costs (Miami-Dade County, Florida v. Advance Cargo Services, Inc., et al. in the Florida Circuit Court). In addition to the 17 defendants named in the lawsuit, 243 other agencies and companies were also named as PRPs and contributors to the contamination. American's and AMR Eagle's portion of the cleanup costs cannot be reasonably estimated due to various factors, including the unknown extent of the remedial actions that may be required, the proportion of the cost that will ultimately be recovered from the responsible parties, and uncertainties regarding the environmental agencies that will ultimately supervise the remedial activities and the nature of that supervision. The Company is vigorously defending the lawsuit. 17 20 Item 4. Submission of Matters to a Vote of Security Holders The owners of 138,215,811 shares of common stock, or 89 percent of shares outstanding, were represented at the annual meeting of stockholders on May 15, 2002 at the American Airlines Training & Conference Center, Flagship Auditorium, 4501 Highway 360 South, Fort Worth, Texas. Elected as directors of the Corporation, each receiving a minimum of 135,637,573 votes were: John W. Bachmann Ann McLaughlin Korologos David L. Boren Michael A. Miles Edward A. Brennan Philip J. Purcell Donald J. Carty Joe M. Rodgers Armando M. Codina Judith Rodin Earl G. Graves Roger T. Staubach Stockholders ratified the appointment of Ernst & Young LLP as independent auditors for the Corporation for 2002. The vote was 132,769,970 in favor; 4,927,896 against; and 517,945 abstaining. A stockholder proposal to recommend that the Company affirm its political non-partisanship - submitted by Mrs. Evelyn Y. Davis - was defeated. The vote was 18,069,575 in favor; 95,602,793 against; 2,449,216 abstaining; and 22,094,227 non-voting. A stockholder proposal relating to increasing the Board of Directors independence by nominating only independent directors to key board committees - submitted by Mr. John Chevedden - was defeated. The vote was 11,207,257 in favor; 102,829,057 against; 2,085,270 abstaining; and 22,094,227 non-voting. Item 6. Exhibits and Reports on Form 8-K The following exhibits are included herein: 3.1 Bylaws of AMR Corporation, amended as of April 2, 2002. 10.1 Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Roger T. Staubach. 10.2 Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Edward A. Brennan. 10.3 Deferred Compensation Agreement, dated as of January 14, 2002 between AMR and Joe M. Rodgers. 10.4 Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Judith Rodin. 10.5 Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and John W. Bachmann. 10.6 Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Armando M. Codina. 10.7 Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Philip J. Purcell. 10.8 American Airlines, Inc. 2002 Employee Profit Sharing Plan. 10.9 American Airlines, Inc. 2002 Incentive Compensation Plan for Officers and Key Employees. 10.10 AMR Corporation 2002-2004 Performance Share Plan for Officers and Key Employees under the 1998 Long-Term Incentive Plan, as amended. 18 21 Item 6. Exhibits and Reports on Form 8-K (continued) 10.11 AMR Corporation 2002-2004 Performance Share Program Deferred Stock Award Agreement under the 1998 Long-Term Incentive Plan, as amended. 10.12 Current form of Stock Option Agreement under the 1998 Long-Term Incentive Plan, as amended. 12 Computation of ratio of earnings to fixed charges for the three and six months ended June 30, 2002 and 2001. Form 8-Ks filed under Item 5 - Other Events On June 13, 2002, AMR filed a report on Form 8-K relating to a press release issued by American to announce the appointment of Jeffrey C. Campbell as Senior Vice President and Chief Financial Officer of the Company. On June 19, 2002, AMR filed a report on Form 8-K to provide updated monthly guidance on unit cost, fuel, traffic and capacity for the months of May through August 2002. Form 8-Ks furnished under Item 9 - Regulation FD Disclosure On April 4, 2002, AMR furnished a report on Form 8-K to announce AMR's intent to host a conference call on April 17, 2002 with the financial community relating to its first quarter 2002 earnings. On May 31, 2002, AMR furnished a report on Form 8-K to provide updated monthly guidance on unit cost, fuel, traffic and capacity for the months of March through July 2002. On June 5, 2002, AMR furnished a report on Form 8-K to provide information regarding a presentation by Don Carty, Chairman and CEO of AMR, at the Merrill Lynch Global Transportation Conference. 19 22 Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized. AMR CORPORATION Date: July 19, 2002 BY: /s/ Jeffrey C. Campbell Jeffrey C. Campbell Senior Vice President and Chief Financial Officer 20
 1
                                                  Exhibit 3.1
                         AMR CORPORATION

                              BYLAWS

                    (As amended April 2, 2002)


                            ARTICLE I

                             Offices

          The registered office of the corporation in the State of

Delaware is to be located in the City of Wilmington, County of New

Castle.  The corporation may have other offices within and without

the State of Delaware.


                            ARTICLE II

                     Meetings of Stockholders

          Section  l.      Annual Meetings.  An annual meeting  of

stockholders to elect directors and to take action upon such other

matters  as may properly come before the meeting shall be held  on

the third Wednesday in May of each year, or on such other day, and

at  such  time and at such place, within or without the  State  of

Delaware,  as the board of directors or the chairman of the  board

may from time to time fix.

          Any  stockholder  wishing to bring a  matter  before  an

annual  meeting  must notify the secretary of the  corporation  of

such fact not less than sixty nor more than ninety days before the

date  of  the meeting.  Such notice shall be in writing and  shall

set  forth the business proposed to be brought before the meeting,

shall   identify   the   stockholder  and   shall   disclose   the

stockholder's interest in the proposed business.



 2

          Section  2.     Special Meetings.  A special meeting  of

stockholders  shall be called by the secretary upon receipt  of  a

request in writing of the board of directors, the chairman of  the

board  or  the president.  Any such meeting shall be held  at  the

principal  business  office of the corporation  unless  the  board

shall  name another place therefor, at the time specified  by  the

body or persons calling such meeting.

          Section   3.      Nominees  For  Election  As  Director.

Nominations for election as director, other than those made by  or

at the direction of the board of directors, must be made by timely

notice  to  the  secretary, setting forth as to each  nominee  the

information required to be included in a proxy statement under the

proxy  rules of the Securities and Exchange Commission.   If  such

election is to occur at an annual meeting of stockholders,  notice

shall  be timely if it meets the requirements of such proxy  rules

for  proposals of security holders to be presented  at  an  annual

meeting.   If  such election is to occur at a special  meeting  of

stockholders,  notice shall be timely if received  not  less  than

ninety days prior to such meeting.

          Section  4.     Notice of Meetings.  Written  notice  of

each meeting of stockholders shall be given which shall state  the

place, date and hour of the meeting, and, in the case of a special

meeting, the purpose or purposes for which the meeting is  called.

Unless  otherwise  provided by law, such notice shall  be  mailed,

postage  prepaid, to each stockholder entitled  to  vote  at  such

meeting,  at  his  address as it appears on  the  records  of  the

corporation, not less than ten nor more than sixty days before the

date  of the meeting.  When a meeting is adjourned to another time

or place, notice need not

                               2

 3

be  given  of the adjourned meeting if the time and place  thereof

are  announced at the meeting at which the adjournment  is  taken,

unless  the  adjournment is for more than thirty  days  or  a  new

record date is fixed  for the adjourned meeting, in which case a

notice  of  the adjourned  meeting  shall be given to each

stockholder  of  record entitled to vote at the meeting.

          Section  5.     Chairman and Secretary at Meetings.   At

any  meeting of stockholders the chairman of the board, or in  his

absence,  the  president, or if neither such person is  available,

then  a person designated by the board of directors, shall preside

at  and act as chairman of the meeting.  The secretary, or in  his

absence a person designated by the chairman of the meeting,  shall

act as secretary of the meeting.

          Section  6.      Proxies.  Each stockholder entitled  to

vote at a meeting of stockholders may authorize another person  or

persons to act for him by proxy, but no such proxy shall be  voted

or  acted  upon after three years from its date, unless the  proxy

provides for a longer period.

          Section   7.      Quorum.   At  all  meetings   of   the

stockholders the holders of one-third of the number of  shares  of

the  stock  issued and outstanding and entitled to  vote  thereat,

present  in  person  or represented by proxy, shall  constitute  a

quorum requisite for the election of directors and the transaction

of  other business, except as otherwise provided by law or by  the

certificate of incorporation or by any resolution of the board  of

directors creating any series of Preferred Stock.


          If  holders of the requisite number of shares to  consti

tute  a  quorum  shall not be present in person or represented  by

proxy at any meeting of stockholders, the stockholders entitled to

vote  thereat,  present in person or represented by  proxy,  shall

have the power to adjourn the meeting from


                              3

 4

time  to time until a quorum shall be present or represented.   At

any  such adjourned meeting at which a quorum shall be present  or

represented, any business may be transacted which might have  been

transacted at the meeting as originally notified.

          Section  8.     Voting.  At any meeting of stockholders,

except  as  otherwise  provided by law or by  the  certificate  of

incorporation  or  by  any resolution of the  board  of  directors

creating any series of Preferred Stock:

          (a)  Each holder of record of a share or shares of stock

on  the record date for determining stockholders entitled to  vote

at  such  meeting shall be entitled to one vote in  person  or  by

proxy for each share of stock so held.

          (b)   Directors shall be elected by a plurality  of  the

votes cast by the holders of Common Stock, present in person or by

proxy.

          (c)   Each  other  question properly  presented  to  any

meeting  of  stockholders shall be decided by a  majority  of  the

votes cast on the question entitled to vote thereon.

          (d)   Elections of directors shall be by ballot but  the

vote upon any other question shall be by ballot only if so ordered

by the chairman of the meeting or if so requested by stockholders,

present in person or represented by proxy, entitled to vote on the

question  and  holding at least l0% of the shares so  entitled  to

vote.

          Section 9.     Action By Written Consent.  Any stockholder

seeking to act by written consent of stockholders shall  notify  the

secretary in writing of such intent and shall request the board of

directors  to  fix a record date for determining the  stockholders

entitled to vote by consent.  The notice shall specify the actions

sought to be taken and, if the election of one or more individuals

                               4

 5

as director  is  sought,  shall  include  as  to  each  nominee   the

information required to be included in a proxy statement under the

proxy  rules  of  the  Securities and Exchange  Commission.   Such

record  date shall not be more than ten (10) days after  the  date

upon which the resolution fixing the record date is adopted by the

board of directors.

          The board of directors shall promptly, but in all events

within  ten (10) days after the date on which the written  request

for  fixing a record date was received by the secretary,  adopt  a

resolution  fixing the record date.  If no record  date  has  been

fixed  by the board of directors within ten (10) days of the  date

on  which  such  a  request  is  received,  the  record  date  for

determining  stockholders entitled to vote  by  consent,  when  no

prior  action by the board of directors is required by  applicable

law,  shall  be  the first date on which a signed written  consent

setting  forth  the  action  taken or proposed  to  be  taken  was

delivered to the corporation by delivery to its registered  office

in  the State of Delaware, its principal place of business, or any

officer or agent of the corporation having custody of the book  in

which  proceedings  of  meetings  of  stockholders  are  recorded.

Delivery made to the corporation's registered office shall  be  by

hand or by certified or registered mail, return receipt requested.

If  no  record  date has been fixed by the board of directors  and

prior  action by the board of directors is required by  applicable

law, the record date for determining stockholders entitled to vote

by  consent shall be at the close of business on the date on which

the  board  of directors adopts the resolution taking  such  prior

action.

          Section  l0.     List of Stockholders.  At least ten days

before every meeting of stockholders, a complete list of the stockholders

entitled  to vote at the meeting, arranged in alphabetical  order,

and  showing  the address of each stockholder and  the  number  of

shares registered in the

                                5

 6

name  of  each stockholder shall be prepared.  Such list shall  be

open  to  the  examination  of any stockholder,  for  any  purpose

germane  to  the  meeting, during ordinary business  hours  for  a

period  of  at least ten days prior to the meeting,  either  at  a

place within the city where the meeting is to be held, which place

shall  be  specified in the notice of the meeting, or, if  not  so

specified, at the place where the meeting is to be held. The list

shall also be produced and kept at the time and place of the meeting

during the whole time thereof, and may be inspected by any stockholder

who is present.

          Section ll.    Judges of Election.  Whenever a vote at a

meeting  of  stockholders shall be by ballot, or whenever  written

consent  to action is sought, the proxies and ballots or  consents

shall  be received and taken charge of, and all questions touching

on  the  qualification of voters and the validity of  proxies  and

consents  and  the  acceptance and rejection  of  votes  shall  be

decided  by  two judges of election.  In the case of a meeting  of

stockholders,  such judges of election shall be appointed  by  the

board  of  directors  before or at the meeting,  and  if  no  such

appointment shall have been made, then by the stockholders at  the

meeting.   In the case of a solicitation of consents, such  judges

of  election  shall be appointed by the board of directors  on  or

before  the record date for determining the stockholders  entitled

to  vote  by consent, and if no such appointment shall  have  been

made, then by the chairman of the board or the president.  If  for

any  reason either of the judges of election previously  appointed

shall  fail to attend or refuse or be unable to serve, a judge  of

election  in  place  of any so failing to attend  or  refusing  or

unable to serve, shall be appointed by the board of directors, the

stockholders  at  the meeting, the chairman of the  board  or  the

president.


                                6

 7

                           ARTICLE III

                Directors:  Number, Election, Etc.

          Section  l.      Number.  The board of  directors  shall

consist  of  such number of members, not less than three,  as  the

board  of directors may from time to time determine by resolution,

plus such additional persons as the holders of the Preferred Stock

may be entitled from time to time,

pursuant  to  the  provisions of any resolution of  the  board  of

directors creating any series of Preferred Stock, to elect to  the

board of directors.

          Section  2.      Election,  Term, Vacancies.   Directors

shall  be elected each year at the annual meeting of stockholders,

except  as  hereinafter provided, and shall hold office until  the

next  annual election and until their successors are duly  elected

and   qualified.    Vacancies  and  newly  created   directorships

resulting  from any increase in the authorized number of directors

may  be  filled  by a majority of the directors  then  in  office,

although less than a quorum.

          Section 3.     Resignation.  Any director may resign  at

any time by giving written notice of such resignation to the board

of  directors,  the chairman of the board, the  president  or  the

secretary.   Any such resignation shall take effect  at  the  time

specified  therein or, if no time be specified, upon  the  receipt

thereof  by  the  board  of directors or one  of  the  above-named

officers  and,  unless specified therein, the acceptance  of  such

resignation shall not be necessary to make it effective.

          Section  4.      Removal.  Any director may  be  removed

from  office at any time, with or without cause, by a  vote  of  a

majority of a quorum of the stockholders entitled to vote  at  any

regular meeting or at any special meeting called for the purpose.


          Section  5.      Fees  and  Expenses.   Directors  shall

receive  such  fees and expenses as the board of  directors  shall

from time to time prescribe.

                               7

 8

                            ARTICLE IV

                      Meetings of Directors

          Section  l.      Regular Meetings.  Regular meetings  of

the  board  of directors shall be held at the principal office  of

the  corporation, or at such other place (within  or  without  the

State of Delaware), and at such time, as may from time to time  be

prescribed by the board of directors or stockholders.   A  regular

annual  meeting  of  the board of directors for  the  election  of

officers  and the transaction of other business shall be  held  on

the  same day as the annual meeting of the stockholders or on such

other  day  and at such time and place as the board  of  directors

shall determine.  No notice need be given of any regular meeting.

          Section  2.      Special Meetings.  Special meetings  of

the  board  of  directors may be held at  such  place  (within  or

without  the State of Delaware) and at such time as may from  time

to  time  be  determined by the board of directors or  as  may  be

specified in the call and notice of any meeting.  Any such meeting

shall  be  held  at  the call of the chairman of  the  board,  the

president,  a  vice  president, the  secretary,  or  two  or  more

directors.   Notice  of a special meeting of  directors  shall  be

mailed  to each director at least three days prior to the  meeting

date,  provided that in lieu thereof, notice may be given to  each

director  personally or by telephone, or dispatched by  telegraph,

at least one day prior to the meeting date.

          Section  3.     Waiver of Notice.  In lieu of notice  of

meeting,  a  waiver thereof in writing, signed by  the  person  or

persons  entitled to said notice whether before or after the  time

stated  therein, shall be deemed equivalent thereto.  Any director

present in person at a meeting of the board of directors shall  be

deemed to have waived notice of the time and place of meeting.

          Section 4.     Action Without Meeting.  Unless otherwise

restricted  by  the  certificate  of  incorporation,  any   action

required  or permitted to be taken at any meeting of the board  of

directors  or  of  any committee thereof may be  taken  without  a

meeting  if  all  members of the board of  directors  or  of  such

committee, as the case may be, consent thereto in writing, and the

writing  or writings are filed with the minutes of the proceedings

of the board of directors or of such committee.

                              8
 9


          Section  5.      Quorum.  At all meetings of the  board,

one-third  of  the  total number of directors shall  constitute  a

quorum for the transaction of business.  The act of a majority  of

the  directors present at any meeting at which there is  a  quorum

shall  be  the  act of the board of directors, except  as  may  be

otherwise specifically provided by law.

          If at any meeting there is less than a quorum present, a

majority  of those present (or if only one be present,  then  that

one),  may  adjourn the meeting from time to time without  further

notice  other  than  announced at the meeting until  a  quorum  is

present.   At such adjourned meeting at which a quorum is present,

any business may be transacted which might have been transacted at

the meeting as originally scheduled.

          Section  6.      Business Transacted.  Unless  otherwise

indicated  in  the  notice  of meeting or  required  by  law,  the

certificate of incorporation or bylaws of the corporation, any and

all business may be transacted at any directors' meeting.


                            ARTICLE V

                 Powers of the Board of Directors

          The  management of all the property and business of  the

corporation and the regulation and government of its affairs shall

be  vested  in the board of directors.  In addition to the  powers

and   authorities   by  these  bylaws  and  the   certificate   of

incorporation expressly conferred on them, the board of  directors

may  exercise all such powers of the corporation and do  all  such

lawful acts and things as are not by law, or by the certificate of

incorporation  or  by  these bylaws directed  or  required  to  be

exercised or done by the stockholders.

                                 9
 10

                            ARTICLE VI

                            Committees

          Section  l.      Executive  Committee.   The  board   of

directors  may, by resolution passed by a majority  of  the  whole

board,  designate an executive committee, to consist of  three  or

more  members.  The chief executive officer plus one other  member

of the executive committee shall constitute a quorum.

          The  executive committee shall have and may exercise all

the  powers and authority of the board of directors in the  manage

ment  of  the  business and affairs of the corporation,  with  the

exception  of  such  powers and authority as may  be  specifically

reserved to the board of directors by law or by resolution adopted

by the board of directors.

          Section  2.     Audit Committee. The board of directors may,

by resolution  passed by a majority of the whole board, designate

an audit committee, to consist of three or more members,

none of the members of which shall be employees or officers of the

corporation.   A  majority of the members of the  audit  committee

shall constitute a quorum.

          The  audit committee shall from time to time review  and

make recommendations to the board of directors with respect to the

selection  of  independent auditors, the  fees  to  be  paid  such

auditors,  the adequacy of the audit and accounting procedures  of

the  corporation,  and such other matters as may  be  specifically

delegated  to  the committee by the board of directors.   In  this

connection  the audit committee shall, at its request,  meet  with

representatives of the independent auditors and with the financial

officers of the corporation separately or jointly.

          Section  3.     Compensation/Nominating Committee.   The

board of directors may, by resolution passed by a majority of  the

                               10
 11

whole  board,  designate a compensation/nominating  committee,  to

consist of three or more members of the board of directors, except

that no member of the compensation/nominating committee may (i) be

an  employee  or  officer of the corporation or  (ii)  maintain  a

relationship with the Corporation that would cause such member  to

be   ineligible  for  membership  on  the  compensation/nominating

committee  pursuant  to  rules  or  regulations  adopted  by   the

Securities  and Exchange Commission, the Internal Revenue  Service

or  any  other governmental agency.  A majority of the members  of

the compensation/nominating committee shall constitute a quorum.

           The  compensation/nominating committee shall from time to

time review and make recommendations to the board of  directors with

respect to the management remuneration policies of the corporation

including  but not limited to salary rates and fringe benefits  of

elected  officers,  other  remuneration plans  such  as  incentive

compensation, deferred compensation and stock option plans,

directors' compensation and benefits.  The compensation/nominating

committee  shall  also  make  recommendations  to  the  board   of

directors (i) concerning suitable candidates for election  to  the

board,  (ii) regarding assignments to board committees, and  (iii)

with  respect  to  promotions, changes and  succession  among  the

senior management of the corporation and such other matters as may

be  specifically  delegated  to the  committee  by  the  board  of

directors.

          Section  4.      Governance  Committee.   The  board  of

directors  may, by resolution passed by a majority  of  the  whole

board,  designate a governance committee, to consist of  three  or

more  members, none of the members of which shall be employees  or

officers  of  the corporation.  A majority of the members  of  the

nominating and governance committee shall constitute a quorum.

          The  governance committee shall make recommendations  to

the  board  of directors  concerning the practices and  procedures

                               11
 12

for  the proper and efficient management of the board of directors

as  determined  by the committee.  The governance committee  shall

perform such other duties as may be specifically delegated to  the

committee by the board of directors.

          Section 5.     Committee Procedure, Seal.

          (a)  The executive, compensation/nominating, governance,

and audit committees shall keep regular minutes of their meetings,

which  shall be reported to the board of directors, and shall  fix

their own rules of procedures.

          (b)  The executive, compensation/nominating, governance,

and  audit  committees may each authorize the seal of the  corpora

tion to be affixed to all papers which may require it.

(c)   In  the  absence, or disqualification, of a  member  of  any

committee,  the members of that committee present at  any  meeting

and  not  disqualified from voting, whether  or  not  constituting

a  quorum, may unanimously appoint another member of the board  of

directors  to  act at the meeting in the place of such  absent  or

disqualified member.

          Section   6.      Special  Committees.   The  board   of

directors  may,  from  time to time, by  resolution  passed  by  a

majority  of  the  whole  board, designate  one  or  more  special

committees.   Each such committee shall have such duties  and  may

exercise  such  powers  as are granted to  it  in  the  resolution

designating  the members thereof.  Each such committee  shall  fix

its own rules of procedure.



                            ARTICLE VII

                         Indemnification

Section  l.      Nature  of  Indemnity.   The  corporation   shall

indemnify any person who was or is a party or is threatened to  be


                                12
 13

made  a party to any threatened, pending or completed action, suit

or   proceeding,   whether  civil,  criminal,  administrative   or

investigative  by  reason of the fact that he is  or  was  or  has

agreed to become a director or officer of the corporation,  or  is

or  was  serving  or  has agreed to serve at the  request  of  the

corporation  as  a  director or officer, of  another  corporation,

partnership,  joint  venture, trust or  other  enterprise,  or  by

reason of any action alleged to have been taken or omitted in such

capacity, and may indemnify any person who was or is a party or is

threatened to be made a party to such an action by reason  of  the

fact  that  he  is or was or has agreed to become an  employee  or

agent  of  the corporation, or is or was serving or has agreed  to

serve at the request of the  corporation  as an employee or agent

of another  corporation, partnership, joint venture, trust or other

enterprise, against expenses (including attorneys' fees), judgments,

fines and amounts paid in settlement actually and reasonably incurred

by him or on his  behalf in connection with such action, suit or

proceeding and any appeal therefrom, if he acted in good faith and

in a manner he reasonably believed to be in or not opposed to the best

interests of the corporation, and, with respect to any criminal action

or proceeding had  no reasonable cause to believe  his  conduct  was

unlawful; except that in the case of an action or suit  by  or  in

the  right  of the corporation to procure a judgment in its  favor

(l)  such  indemnification shall be limited to expenses (including

attorneys'  fees) actually and reasonably incurred by such  person

in  the  defense or settlement of such action or suit, and (2)  no

indemnification  shall be made in respect of any claim,  issue  or

matter  as  to  which such person shall have been adjudged  to  be

liable  to the corporation unless and only to the extent that  the

Delaware  Court of Chancery or the court in which such  action  or

suit  was  brought shall determine upon application that,  despite

the adjudication of liability but in view of all the circumstances

of  the  case,  such person is fairly and reasonably  entitled  to

indemnity  for such expenses which the Delaware Court of  Chancery

or such other court shall deem proper.

                             13
 14

          The  termination  of any action, suit or  proceeding  by

judgment,  order, settlement, conviction, or upon a plea  of  nolo

contendere  or  its  equivalent, shall not, of  itself,  create  a

presumption  that the person did not act in good faith  and  in  a

manner which he reasonably believed to be in or not opposed to the

best  interests  of  the corporation, and,  with  respect  to  any

criminal  action  or proceeding, had reasonable cause  to  believe

that his conduct was unlawful.


          Section 2.     Successful Defense.  To the extent that a

director, officer, employee or agent of the corporation  has  been

successful  on the merits or otherwise in defense of  any  action,

suit  or  proceeding referred to in Section l hereof or in defense

of  any   claim, issue or matter therein, he shall be  indemnified

against   expenses  (including  attorneys'  fees)   actually   and

reasonably incurred by him in connection therewith.

          Section  3.  Determination That Indemnification Is Proper.

          (a)  Any indemnification of a director or officer of the

corporation  under Section l hereof (unless ordered  by  a  court)

shall  be made by the corporation unless a determination  is  made

that  indemnification of the director or officer is not proper  in

the  circumstances because he has not met the applicable  standard

of  conduct  set  forth in Section l hereof.   Such  determination

shall  be  made, with respect to a director or officer, (1)  by  a

majority vote of the directors who are not parties to such action,

suit  or proceeding, even though less than a quorum, or (2)  by  a

committee of such directors designated by a majority vote of  such

directors, even though less than a quorum, or (3) if there are  no

such  directors,  or if such directors so direct,  by  independent

legal counsel in a written opinion, or (4) by the stockholders.

    (b)  Any indemnification  of  an  employee or  agent  of   the

corporation  (who  is  not also a director  or  officer  of  the

                                14

 15
corporation) under Section l hereof (unless ordered by a  court)

may  be  made  by  the  corporation upon  a  determination  that

indemnification  of  the  employee or agent  is  proper  in  the

circumstances because such person has met the applicable standard

of conduct set forth in Section l hereof.  Such determination, in

the case of an employee or agent, may be made (1) in accordance with

the  procedures outlined in the second sentence of  Section  3(a),

or  (2) by an officer of the corporation, upon delegation of  such

authority by a majority of the Board of Directors.

          Section  4.      Advance Payment of Expenses.   Expenses

(including  attorneys' fees) incurred by a director or officer  in

defending  any  civil, criminal, administrative  or  investigative

action,  suit  or proceeding shall be paid by the  corporation  in

advance  of  the  final  disposition  of  such  action,  suit   or

proceeding upon receipt of an undertaking by or on behalf  of  the

director or officer to repay such amount if it shall ultimately be

determined  that  he  is  not entitled to be  indemnified  by  the

corporation   as  authorized  in  this  Article.   Such   expenses

(including attorneys' fees) incurred by other employees and agents

may  be  so  paid upon such terms and conditions, if any,  as  the

corporation  deems  appropriate.   The  board  of  directors   may

authorize  the  corporation's counsel  to  represent  a  director,

officer,  employee  or agent in any action,  suit  or  proceeding,

whether or not the corporation is a party to such action, suit  or

proceeding.

           Section  5.    Procedure for Indemnification of Directors or

Officers.   Any  indemnification of a director or officer  of  the

corporation  under Sections l and 2, or advance of costs,  charges

and  expenses  of a director or officer under Section  4  of  this

Article, shall be made promptly, and in any event within 60  days,

upon  the  written  request of the director or  officer.   If  the

corporation fails to respond within 60 days, then the request  for

indemnification  shall  be deemed to be approved.   The  right  to

indemnification  or advances as granted by this Article  shall  be

enforceable  by the director or officer in any court of  competent

jurisdiction if the corporation denies such request, in  whole  or

                              15
 16

in  part.  Such person's costs and expenses incurred in connection

with  successfully  establishing his right to indemnification,  in

whole or in part, in any such action shall also be indemnified  by

the corporation.  It shall be a defense to any such action (other

than an action brought to enforce a claim for the advance of costs,

charges and expenses under Section 4 of this Article where the required

undertaking,  if  any, has been received by the corporation)  that

the  claimant  has not met the standard of conduct  set  forth  in

Section  l of this Article, but the burden of proving such defense

shall  be  on  the  corporation.   Neither  the  failure  of   the

corporation  (including  its board of  directors  or  a  committee

thereof,  its independent legal counsel, and its stockholders)  to

have made a determination prior to the commencement of such action

that   indemnification  of  the  claimant   is   proper   in   the

circumstances  because  he  has met  the  applicable  standard  of

conduct set forth in Section l of this Article, nor the fact  that

there   has  been  an  actual  determination  by  the  corporation

(including  its  board  of directors or a committee  thereof,  its

independent legal counsel, and its stockholders) that the claimant

has  not  met  such  applicable standard of conduct,  shall  be  a

defense  to  the action or create a presumption that the  claimant

has not met the applicable standard of conduct.

          Section  6.     Survival; Preservation of Other  Rights.

The  foregoing indemnification provisions shall be deemed to be  a

contract  between  the  corporation and  each  director,  officer,

employee  and agent who serves in such capacity at any time  while

these  provisions  as  well  as the  relevant  provisions  of  the

Delaware  Corporation  Law  are  in  effect  and  any  repeal   or

modification thereof shall not affect any right or obligation then

existing  with  respect to any state of facts then  or  previously

existing  or  any  action,  suit,  or  proceeding  previously   or

thereafter  brought or threatened based in whole or in  part  upon

any  such  state  of facts.  Such a Acontract right@  may  not  be

modified  retroactively  without the  consent  of  such  director,

officer, employee or agent.

                                  16
 17

          The  indemnification provided by this Article VII  shall

not  be  deemed  exclusive  of any other  rights  to  which  those

indemnified  may be entitled under any bylaw, agreement,  vote  of

stockholders or disinterested directors or otherwise, both  as  to

action  in  his  official capacity and as  to  action  in  another

capacity  while holding such office, and shall continue  as  to  a

person who has ceased to be a director, officer, employee or agent

and  shall  inure  to  the  benefit of the  heirs,  executors  and

administrators of such a person.

          Section   7.       Insurance.   The  corporation   shall

purchase and maintain insurance on behalf of any person who is  or

was  or  has agreed to become a director or officer of  the  corpo

ration, or is or was serving at the request of the corporation  as

a  director or officer of another corporation, partnership,  joint

venture,  trust or other enterprise against any liability asserted

against  him  and  incurred by him or on his behalf  in  any  such

capacity, or arising out of his status as such, whether or not the

corporation  would have the power to indemnify  him  against  such

liability under the provisions of this Article, provided that such

insurance  is  available on acceptable terms, which  determination

shall  be  made  by a vote of a majority of the  entire  board  of

directors.

          Section  8.    Savings Clause. If this Article or any portion

hereof  shall  be  invalidated on  any  ground  by  any  court  of

competent  jurisdiction, then the corporation  shall  nevertheless

indemnify each director or officer and may indemnify each employee

or  agent  of  the corporation as to costs, charges  and  expenses

(including attorneys' fees), judgments, fines and amounts paid  in

settlement with respect to any action, suit or proceeding, whether

civil,  criminal,  administrative or investigative,  including  an

action  by or in the right of the corporation, to the full  extent

permitted by any applicable portion of this Article that shall not

have been invalidated and to the full extent permitted by

applicable law.


                                17

 18
                           ARTICLE VIII

                             Officers

          Section l.     General.  The officers of the corporation

shall be the chairman of the board, a vice-chairman, president,  a

chief  operating  officer, one or more vice presidents  (including

executive   vice   presidents  and  senior  vice  presidents),   a

secretary,  a controller, a treasurer, and such other  subordinate

officers as may from time to time be designated and elected by the

board of directors.

          Section 2.     Other Offices.  The chairman of the board

shall  be  chosen by the board of directors from among  their  own

number.  The other officers of the corporation may or may  not  be

directors.

          Section 3.     Term.  Officers of the corporation  shall

be  elected by the board of directors and shall hold their  respec

tive offices during the pleasure of the board and any officer  may

be  removed at any time, with or without cause, by a vote  of  the

majority  of  the directors.  Each officer shall hold office  from

the  time  of  his appointment and qualification  until  the  next

annual  election of officers or until his earlier  resignation  or

removal  except that upon election thereof a shorter term  may  be

designated by the board of directors.  Any officer may  resign  at

any time upon written notice to the corporation.

          Section   4.      Compensation.   The  compensation   of

officers of the corporation shall be fixed, from time to time,  by

the board of directors.


          Section  5.      Vacancy.  In case  any  office  becomes

vacant   by   death,  resignation,  retirement,  disqualification,

                               18
 19

removal  from  office, or any other cause, the board of  directors

may  abolish  the office (except that of president, secretary  and

treasurer),  elect an officer to fill such vacancy  or  allow  the

office  to  remain vacant for such time as the board of  directors

deems appropriate.

                            ARTICLE IX

                        Duties of Officers

          Section  l.      Chairman  of the Board,  Vice-Chairman,

President,  Chief Operating Officer.  The chairman  of  the  board

shall be the chief executive officer of the corporation.  He shall

have general supervisory powers over all other officers, employees

and  agents of the corporation for the proper performance of their

duties  and shall otherwise have the general powers and duties  of

supervision  and management usually vested in the chief  executive

officer  of  a  corporation.   The  vice-chairman  and  the  chief

operating  officer shall perform such duties as shall be  assigned

to  each  by the board of directors or the chairman of the  board.

The  president  shall  have  the  general  powers  and  duties  of

supervision  and  management of the corporation  as  the  chairman

shall assign.  The chairman of the board shall preside at and  act

as  chairman  of  all  meetings of the board  of  directors.   The

president  shall preside at any meeting of the board of  directors

in  the  event of the absence of the chairman of the board.    The

offices  of  (a)  chairman  of  the board  and  president  or  (b)

president  and chief operating officer may be filled by  the  same

individual.

          Section  2.      Vice Presidents.  Each  vice  president

(including  executive vice presidents and senior vice  presidents)

shall perform such duties as shall be assigned to him by the board

of directors, the chairman of the board or the president.

          Section  3.      Secretary.  The secretary shall  record

all  proceedings  of  the meetings of the corporation,  its  stock

                               19

 20

holders  and the board of directors and shall perform  such  other

duties as shall be assigned to him by the board of directors,  the

chairman of the board, or the president.  Any part or all  of  the

duties  of the secretary may be delegated to one or more assistant

secretaries.

          Section 4.     Controller.  The controller shall perform

such  duties  as shall be assigned to him by the chairman  of  the

board,  the president or such vice president as may be responsible

for financial matters.  Any or all of the duties of the controller

may be delegated to one or more assistant controllers.

          Section  5.      Treasurer.  The treasurer shall,  under

the  direction of the chairman of the board, the president or such

vice  president as may be responsible for financial matters,  have

the  custody  of  the  funds and securities  of  the  corporation,

subject  to  such regulations as may be imposed by  the  board  of

directors.   He shall deposit, or have deposited, all  monies  and

other  valuable  effects in the name and  to  the  credit  of  the

corporation in such depositories as may be designated by the board

of  directors or as may be designated by the appropriate  officers

pursuant  to  a  resolution of the board of directors.   He  shall

disburse, or have disbursed, the funds of the corporation  as  may

be  ordered  by  the  board of directors  or  properly  authorized

officers,  taking proper vouchers therefor.  If  required  by  the

board of directors he shall give the corporation bond in such  sum

and in such form and with such security as may be satisfactory  to

the board of directors, for the faithful performance of the duties

of  his  office.  He shall perform such other duties as  shall  be

assigned  to  him by the board of directors, the chairman  of  the

board,  the president or such vice president as may be responsible

for  financial matters.  Any or all of the duties of the treasurer

may be delegated to one or more assistant treasurers.


          Section  6.      Other  Officers'  Duties.   Each  other

officer  shall  perform such duties and have such responsibilities

as  may be delegated to him by the superior officer to whom he  is

made  responsible by designation of the chairman of the  board  or

the president.

                                 20

 21
          Section  7.      Absence or Disability.   The  board  of

directors or the chairman of the board may delegate the powers and

duties  of any absent or disabled officer to any other officer  or

to  any  director for the time being.  In the event of the absence

or  temporary  disability  of  the  chairman  of  the  board,  the

president shall assume his powers and duties while he is absent or

so disabled.

                            ARTICLE X

                              Stock

          Section  l.     Certificates.  Certificates of stock  of

the  corporation shall be signed by, or in the name of  the  corpo

ration  by,  the chairman of the board, the president  or  a  vice

president, and by the treasurer or an assistant treasurer, or  the

secretary or an assistant secretary of the corporation.   If  such

certificate is countersigned, (l) by a transfer agent  other  than

the  corporation or its employee, or (2) by a registrar other than

the  corporation or its employee, then any other signature on  the

certificate  may  be a facsimile.  In case any  officer,  transfer

agent,  or  registrar who has signed or whose facsimile  signature

has  been placed upon a certificate shall have ceased to  be  such

officer,  transfer agent, or registrar before such certificate  is

issued,  it may be issued by the corporation with the same  effect

as  if  he were such officer, transfer agent, or registrar at  the

date of issue.

           Section  2.      Transfers.  Shares of stock shall be

transferable on the books of the corporation by the holder of record

thereof in person or by his attorney upon surrender of such certificate

with an assignment endorsed thereon or attached thereto duly executed and

with such proof of authenticity of signatures as the corporation may

reasonably require.  The  board of directors may from time to time

appoint such transfer agents or registrars as it may deem advisable

and may define their powers and duties.  Any such transfer agent or

registrar need not be an employee of  the corporation.

                                21

 22
          Section 3.     Record Holder.  The corporation may treat

the  holder of record of any shares of stock as the complete owner

thereof  entitled to receive dividends and vote such  shares,  and

accordingly shall not be bound to recognize any interest  in  such

shares  on the part of any other person, whether or not  it  shall

have notice thereof.

          Section  4.      Lost  and  Damaged  Certificates.   The

corporation  may  issue a new certificate of stock  to  replace  a

certificate  alleged  to  have been  lost,  stolen,  destroyed  or

mutilated upon such terms and conditions as the board of directors

may from time to time prescribe.

          Section  5.     Fixing Record Date.  In order  that  the

corporation may determine the stockholders entitled to  notice  of

or  to  vote  at  any meeting of stockholders or  any  adjournment

thereof,  or  to  express consent to corporate action  in  writing

without  a meeting, or entitled to receive payment of any dividend

or  other distribution or allotment of any rights, or entitled  to

exercise  any  rights  in  respect of any  change,  conversion  or

exchange  of stock or for the purpose of any other lawful  action,

the  board of directors may fix, in advance, a record date,  which

shall  not  be more than sixty nor less than ten days  before  the

date  of such meeting, nor more than sixty days prior to any other

action



                            ARTICLE XI

                          Miscellaneous

          Section  l.      Fiscal Year.  The fiscal  year  of  the

corporation  shall  begin  upon  the  first  day  of  January  and

terminate upon the 3lst day of December, in each year.

          Section  2.      Stockholder  Inspection  of  Books  and

Records.  The board of directors from time to time shall determine

whether and to what extent and at what times and places and  under

                                  22

 23
what  conditions  and regulations the accounts and  books  of  the

corporation, or any of them, shall be open to the inspection of  a

stockholder and no stockholder shall have any right to inspect any

account,  book or document of the corporation except as  conferred

by statute or authorized by resolution of the board of directors.

          Section  3.      Seal.   The  corporate  seal  shall  be

circular  in  form  and have inscribed thereon  the  name  of  the

corporation and the words "Corporate Seal, Delaware."



                           ARTICLE XII

                       Amendments to Bylaws

          Subject to the provisions of any resolution of the board

of  directors creating any series of Preferred Stock, the board of

directors  shall have power from time to time to  make,  alter  or

repeal  bylaws, but any bylaws made by the board of directors  may

be  altered, amended or repealed by the stockholders at any annual

meeting  of stockholders, or at any special meeting provided  that

notice  of  such  proposed  alteration,  amendment  or  repeal  is

included in the notice of such special meeting.















                                  23


 1
                                        Exhibit 10.1






                                        December 18, 2001

Mr. Roger T. Staubach
Chairman & CEO
The Staubach Company
15601 Dallas Parkway
Suite 400
Addison, TX 75001

Dear Mr. Staubach:

           This will confirm the following agreement relating  to
the deferral of your director's fees in 2002.

            1.    All  director's  fees  and  retainers  ("Fees")
payable  to you in connection with your service on the boards  of
directors   (including  committees  of  such   boards)   of   AMR
Corporation and American Airlines, Inc. for the period January 1,
2002 through December 31, 2002 , will be deferred and paid to you
in accordance with this letter agreement.

           2.    Fees will be converted to Stock Equivalent Units
in accordance with the Directors' Stock Equivalent Purchase Plan,
a copy of which is attached hereto as Exhibit A (the "Plan").

           3.   Within 30 days of the date when you cease to be a
Director  of AMR Corporation, the Stock Equivalent Units  accrued
pursuant to the Plan will be converted to cash and paid to you by
multiplying  the  number of such Stock Equivalent  Units  by  the
arithmetic  mean of the high and the low of AMR stock during  the
month when you ceased to be a Director of AMR Corporation.

           4.   AMR's obligation to make the payment pursuant  to
paragraph 3 hereof will not be released or modified by reason  of
your  death.   In  such event, the cash payment  contemplated  by
paragraph 3 will be made to Marianne Staubach.





 2



           If  the  foregoing  is  satisfactory  to  you,  please
indicate  by signing one of the originals (two are enclosed)  and
returning it to me.

                                        Very truly yours,




                                        Charles D. MarLett
                                        Corporate Secretary


Accepted and agreed:





Roger T. Staubach



Date

















 1
                                   Exhibit 10.2

                                   December 18, 2001



Mr. Edward A. Brennan
400 North Michigan Avenue
Suite 400
Chicago, IL 60611

Dear Ed:

     You've elected to defer your retainer and meeting fees for
calendar year 2002.

     In June 1998, you and the Company entered into an agreement
governing the fees you had deferred through that date.  That
agreement is attached.

     I'm assuming you want to continue to defer your fees in
accordance with the June 1998 letter.  If so, please sign below
and return to me.  If you want another agreement, please let me
know the details and we'll see what we can do.

     Thank you for your cooperation and if there are questions,
please let me know.


                                   Very truly yours,



                                   Charles D. MarLett
                                   Corporate Secretary


Deferral of 2002 fees to be in accordance with June 2, 1998
letter:



AGREED:   ___________________________________
          Edward A. Brennan


P.S. I'm enclosing two originals - one to be returned to me and
     the other for your files.

Attachment

 1
                                        Exhibit 10.3






                                        January 14, 2002

Mr. Joe M. Rodgers
Chairman
The JMR Group
P. O. Box 158838
Nashville, Tennessee 37215-8838

Dear Joe:

           This will confirm the following agreement relating  to
the deferral of your director's fees in 2002.

            1.    All  director's  fees  and  retainers  ("Fees")
payable  to you in connection with your service on the boards  of
directors   (including  committees  of  such   boards)   of   AMR
Corporation and American Airlines, Inc. for the period January 1,
2002 through December 31, 2002 , will be deferred and paid to you
in accordance with this letter agreement.

           2.    Fees will be converted to Stock Equivalent Units
in accordance with the Directors' Stock Equivalent Purchase Plan,
a copy of which is attached hereto as Exhibit A (the "Plan").

            3.    On  or  before  January  31,  2003,  the  Stock
Equivalent  Units accrued pursuant to the Plan will be  converted
to  cash and paid to you by multiplying the number of such  Stock
Equivalent Units by the arithmetic mean of the high and  the  low
of AMR stock during November 2002.

           4.   AMR's obligation to make the payment pursuant  to
paragraph 3 hereof will not be released or modified by reason  of
your  death.   In  such event, the cash payment  contemplated  by
paragraph 3 will be made to your estate.







 2

           If  the  foregoing  is  satisfactory  to  you,  please
indicate  by signing one of the originals (two are enclosed)  and
returning it to me.

                                        Very truly yours,




                                        Charles D. MarLett
                                        Corporate Secretary


Accepted and agreed:





Joe M. Rodgers



Date
















 1
                                        Exhibit 10.4





                                        December 18, 2001


Judith Rodin, PhD.
President
University of Pennsylvania
100 College Hall
Philadelphia, PA   19104

Dear Judith:

          This  will confirm the following agreement relating  to
the deferral of your directors' fees and retainers in 2002:

          1.     All   directors'  fees  and  retainers  ("Fees")
payable  to you in connection with your service on the boards  of
directors   (including  committees  of  such   boards)   of   AMR
Corporation and American Airlines, Inc. for the period January 1,
2002 through December 31, 2002, will be deferred and paid to  you
in accordance with this letter agreement:

          2.    Fees will be converted to Stock Equivalent  Units
in accordance with the Directors' Stock Equivalent Purchase Plan,
a copy of which is attached hereto as Exhibit A (the "Plan").

          3.    Upon  your retirement from the Board of Directors
of  AMR  the Stock Equivalent Units accrued pursuant to the  Plan
will  be  converted  to cash and paid to you by  multiplying  the
number  of  Stock  Equivalent  Units  as  of  the  date  of  your
retirement  by  the arithmetic mean of the high and  low  of  AMR
stock ("fair market value") during the calendar month immediately
preceding  such retirement date.  Such payment will occur  within
30 days of your retirement date.

          4.    AMR's  obligation  to make payments  pursuant  to
paragraph 3 hereof will not be released or modified by reason  of
your  death.  In such event, the number of Stock Equivalent Units
as  of  your date of death will be multiplied by the fair  market
value   of  AMR  stock  during  the  calendar  month  immediately
preceding  your death, and the amount paid to the Trustees  under
your  Revocable Agreement of Trust, dated September 15, 1997,  as
amended November 3, 1997, Judith Rodin Settlor and Trustee.



 2


          If   the  foregoing  is  satisfactory  to  you,  please
indicate  by signing one of the originals (two are enclosed)  and
returning it to me.

                                        Very truly yours,




                                        Charles D. MarLett
                                        Corporate Secretary




Accepted and agreed:





Judith Rodin




Date













 1
                                   Exhibit 10.5

                                   December 18, 2001





Mr. John W. Bachmann
Managing Director
Edward Jones
12555 Manchester Road
St. Louis, MO 63131-3279

Dear Mr. Bachmann:

           This will confirm the following agreement relating  to
the deferral of your director's fees in 2002.

            1.    All  director's  fees  and  retainers  ("Fees")
payable  to you in connection with your service on the boards  of
directors   (including  committees  of  such   boards)   of   AMR
Corporation and American Airlines, Inc. for the period January 1,
2002 through December 31, 2002, will be deferred and paid to  you
in accordance with this letter agreement.

           2.    Fees will be converted to Stock Equivalent Units
in accordance with the Directors' Stock Equivalent Purchase Plan,
a copy of which is attached hereto as Exhibit A (the "Plan").

           3.   Within 30 days of the date when you cease to be a
Director  of AMR Corporation, the Stock Equivalent Units  accrued
pursuant to the Plan will be converted to cash and paid to you by
multiplying  the  number of such Stock Equivalent  Units  by  the
arithmetic  mean  of  the high and the low of  AMR  stock  ("fair
market  value") during the month when you ceased to be a Director
of AMR Corporation.

           4.   AMR's obligation to make the payment pursuant  to
paragraph 3 hereof will not be released or modified by reason  of
your  death.  In such event, the number of Stock Equivalent Units
as  of  your date of death will be multiplied by the fair  market
value   of  AMR  stock  during  the  calendar  month  immediately
preceding your death, and the amount paid to Katharine Bachmann.






 2


           If  the  foregoing  is  satisfactory  to  you,  please
indicate  by signing one of the originals (two are enclosed)  and
returning it to me.

                                        Very truly yours,




                                        Charles D. MarLett
                                        Corporate Secretary


Accepted and agreed:





John W. Bachmann



Date















 1
                                        Exhibit 10.6





                                        December 18, 2001





Mr. Armando M. Codina
Chairman
Codina Group, Inc.
355 Alhambra Circle, Suite 900
Coral Gables, FL 33134

Dear Armando:

          This  will confirm the following agreement relating  to
the deferral of, and payment of, your directors' fees in 2002:

          1.     All   directors'  fees  and  retainers  ("Fees")
payable  to you in connection with your service on the boards  of
directors   (including  committees  of  such   boards)   of   AMR
Corporation  and American Airlines, Inc. for the period   January
1,  2002, through December 31, 2002, will be deferred and paid to
you in accordance with this letter agreement.

          2.    Fees will be converted to Stock Equivalent  Units
in accordance with the Directors' Stock Equivalent Purchase Plan,
a copy of which is attached hereto as Exhibit A (the "Plan").

          3.    On  or  before January 31, 2010,  all  the  Stock
Equivalent  Units will be converted to cash and paid  to  you  by
multiplying  the number of Stock Equivalent Units as of  December
31, 2009, by the arithmetic mean of the high and low of AMR stock
("fair market value") during December 2009.

          4.    AMR's  obligation  to make payments  pursuant  to
paragraph 3 hereof will not be released or modified by reason  of
your  death.  In such event, the number of Stock Equivalent Units
as  of  your date of death will be multiplied by the fair  market
value   of  AMR  stock  during  the  calendar  month  immediately
preceding your death, and the amount paid to Margarita Codina.



 2

          If   the  foregoing  is  satisfactory  to  you,  please
indicate  by signing one of the originals (two are enclosed)  and
returning it to me.

                                        Very truly yours,




                                        Charles D. MarLett
                                        Corporate Secretary




Accepted and agreed:





Armando M. Codina



Date










 1
                                        Exhibit 10.7




                                        December 18, 2001

Mr. Philip J. Purcell
Morgan Stanley Dean Witter & Co.
2500 Lake Cook Road
Riverwoods, IL 60015

Dear Mr. Purcell:

           This will confirm the following agreement relating  to
the deferral of your director's fees in 2002.

            1.    All  director's  fees  and  retainers  ("Fees")
payable  to you in connection with your service on the boards  of
directors   (including  committees  of  such   boards)   of   AMR
Corporation and American Airlines, Inc. for the period January 1,
2002 through December 31, 2002, will be deferred and paid to  you
in accordance with this letter agreement.

           2.    Fees will be converted to Stock Equivalent Units
in accordance with the Directors' Stock Equivalent Purchase Plan,
a copy of which is attached hereto as Exhibit A (the "Plan").

           3.   Within 30 days of the date when you cease to be a
Director  of AMR Corporation, the Stock Equivalent Units  accrued
pursuant to the Plan will be converted to cash and paid to you by
multiplying  the  number of such Stock Equivalent  Units  by  the
arithmetic  mean  of  the high and the low of  AMR  stock  ("fair
market  value") during the month when you ceased to be a Director
of AMR Corporation.

           4.   AMR's obligation to make the payment pursuant  to
paragraph 3 hereof will not be released or modified by reason  of
your  death.  In such event, the number of Stock Equivalent Units
as  of  your date of death will be multiplied by the fair  market
value   of  AMR  stock  during  the  calendar  month  immediately
preceding your death, and the amount paid to Anne Purcell.







 2

           If  the  foregoing  is  satisfactory  to  you,  please
indicate  by signing one of the originals (two are enclosed)  and
returning it to me.

                                        Very truly yours,




                                        Charles D. MarLett
                                        Corporate Secretary


Accepted and agreed:





Philip J. Purcell



Date






 1
                                            Exhibit 10.8
                2002 EMPLOYEE PROFIT SHARING PLAN


Purpose

The purpose of the 2002 American Airlines Employee Profit Sharing
Plan  ("Plan") is to provide participating employees with a sense
of  commitment to, and direct financial interest in, the  success
of American Airlines, Inc.


Definitions

Capitalized terms not otherwise defined in the Plan will have the
meanings  set  forth  in the 1998 Long Term  Incentive  Plan,  as
amended (the "LTIP").

"AMR" is defined as AMR Corporation.

"Adjusted  Investment" is defined as the sum of American's  notes
payable, current maturities of long-term debt and capital leases,
long-term  debt,  capital  leases,  Present  Value  of  Operating
Leases,  and stockholders' equity, and any accounting adjustments
or  extraordinary or unusual items which may be added or deducted
at  the discretion of the Committee and are approved by the Board
of Directors of AMR.

"Affiliate" is defined as a subsidiary of AMR or any entity  that
is  designated by the Committee as a participating employer under
the  Plan, provided that AMR directly or indirectly owns at least
20%  of the combined voting power of all classes of stock of such
entity.

"American"  is  defined as AMR less AMR subsidiaries  other  than
American Airlines, Inc. and its subsidiaries.

"Average  Adjusted Investment" is defined as the sum of  Adjusted
Investment as of 12/31/01, 3/31/02, 6/30/02, and 9/30/02, divided
by four.

"Calculated Amortization of Operating Leases" is defined  as  the
amortization  expense  associated with the Capitalized  Value  of
Operating Leases as if such leases were accounted for as  capital
leases,  and is determined by the straight-line method  over  the
lease term.

"Capitalized Value of Operating Leases" is defined as the initial
present  value  of  the lease payments required under  American's
aircraft  operating  leases over the initial stated  lease  term,
calculated using a discount rate of Prime plus one percent.

"Committee"   is  defined  as  the  AMR  Incentive   Compensation
Committee.

 2
"Fund" is defined as the profit sharing fund, if any, accumulated
in accordance with this Plan.

"Plan  Earnings"  is  defined as the sum  of  American's  pre-tax
income,  interest  expense,  aircraft  rental  expense,  and  any
accruals   for  American's  Pilot  Variable  Compensation   Plan,
Employee  Profit Sharing Plan, Incentive Compensation  Plan,  and
any  other plan that might be created, at the discretion  of  the
Committee,  less Calculated Amortization of Operating Leases  and
any  accounting  adjustments or extraordinary  or  unusual  items
which may be added or deducted at the discretion of the Committee
and approved by the Board of Directors of AMR.

"Present  Value  of Operating Leases" is defined as  the  present
value  of  the lease payments required under American's  aircraft
operating leases over the remaining lease term, calculated  using
the  discount  rate  of  Prime plus  one  percent.   Amounts  for
3/31/02,  6/30/02,  and 9/30/02 are computed by  determining  the
difference  between the Present Value of Operating Leases  as  of
12/31/02 and 12/31/01 and allocating that difference evenly  over
the four quarters of 2002.

"Prime" is defined as the base rate on corporate loans posted  by
at  least  75%  of the 30 largest U.S. banks which  is  published
daily in the Wall Street Journal.

"Qualified Earnings" is defined as base salaries paid during  the
Plan  year, overtime, holiday pay, skill premiums, longevity pay,
sick pay, vacation pay, shift differential, overrides and license
premiums  and  does  not  include payments  such  as  travel  and
incidental   expenses,  moving  expenses,  relocation   allowance
(COLA),  payouts  from any retirement plan, disability  payments,
workers compensation payments, imputed income from certain travel
service charges or life insurance, or other benefits provided  by
American,  nor  does  it  include any special  one-time  monetary
awards   or   allowances,   lump  sum  payments,   or   incentive
compensation or profit sharing payments.

"Return  on  Investment"  or "ROI" is defined  as  Plan  Earnings
divided by Average Adjusted Investment, stated as a percentage.


Eligibility for Participation

In  order  to  be  eligible  for  a  profit  sharing  award,  the
individual must:

 -   Have worked during the Plan year as a regular full-time  or
  part-time  employee  at  American in a participating  workgroup
  (flight  attendant, reservations, coordinator/planner,  airport
  agent, sky cap, support staff, management levels 04 and below).

                                 2

 3

 -     Have  an adjusted seniority date prior to July 1st  of  the
  Plan  year.  An individual's Qualified Earnings from  the  time
  worked at American will be included in the award calculation.

 -     Be  employed at American or an Affiliate at the time awards
  are  paid.  If at the time awards are paid under the  Plan,  an
  individual has retired from American or an Affiliate, has  been
  laid off, is on a leave of absence with re-instatement rights, is
  disabled  or has died, the award which the individual otherwise
  would have received under the Plan but for such retirement, lay-
  off, leave, disability or death may be paid to the individual or
  his/her estate in the event of death, at the discretion of  the
  Committee.

Notwithstanding the foregoing, however, an employee will  not  be
eligible to participate in the Plan if such employee is,  at  the
same time, eligible to participate in:

  i)the  2002  American Airlines Incentive Compensation Plan  for
     Officers and Key Employees,
  ii)    the Pilot Profit Sharing Plan (as implemented in 1997),
  iii)    any  incentive compensation, profit sharing, commission
     or  other  bonus  plan  for employees  of  any  division  of
     American, or
  iv)     any  incentive compensation, profit sharing, commission
     or other bonus plan sponsored by an Affiliate.

Awards under the Plan will be determined on a proportionate basis
for  participation  in more than one plan  during  a  Plan  year.
Employees  who  transfer from/to Affiliates  or  any  other  plan
described  above  during  a Plan year,  and  satisfy  eligibility
requirements,   will  receive  awards  from  each   plan   on   a
proportionate basis.


The Profit Sharing Fund Accumulation

Performance will be measured by ROI and the Fund will  accumulate
based  on  that performance.  The Fund is established  at  1%  of
Qualified  Earnings  when ROI is equal to 6.4%.   The  fund  will
accumulate  on  a straight-line basis at the rate  of  0.583%  of
qualified earnings for each additional point of ROI.

The profit sharing fund will not exceed an amount equal to 8%  of
Qualified Earnings at levels of ROI above 18.4%.

                                  3

 4
Award Distribution

For  eligible domestic employees (where domestic means the United
States,  Puerto  Rico  and the U.S. Virgin  Islands),  individual
awards  will  be  distributed based on  an  employee's  Qualified
Earnings   for  the  Plan  year  multiplied  by  the  appropriate
percentage of Qualified Earnings based upon the ROI achieved  for
the  Plan  year. The percent of Qualified Earnings used for  Fund
accumulation and award distribution will be the same.

A   portion   of   the  Fund  will  be  allocated  for   eligible
international employees (employees other than those in the United
States,  Puerto Rico and the U.S. Virgin Islands)  based  on  the
aggregate  of  all  eligible international  employees'  Qualified
Earnings  as  a  percentage  of the  aggregate  of  all  eligible
employees'  total Qualified Earnings.  This portion of  the  Fund
will  be  set  aside  for distribution at the discretion  of  the
American officer(s) responsible for such international employees,
subject only to the Committee's approval.


Administration

The Plan will be administered by the Committee which is comprised
of  officers  of American appointed by the Board of Directors  of
AMR.   The  Committee  will  have  authority  to  administer  and
interpret  the  Plan, establish administrative  rules,  determine
eligibility  and take any other action necessary for  the  proper
and  efficient operation of the Plan.  The amount, if any, of the
Fund  shall  be based on a certification of ROI by AMR's  General
Auditor.  A summary of awards under the Plan shall be provided to
the  Board  of  Directors  of AMR at the  first  regular  meeting
following determination of the awards.


Method of Payment

The  Committee shall determine the method of payment  of  awards.
Subject to the terms of the Plan, awards shall be paid as soon as
practicable after audited financial statements for the year  2002
are available.


General

Neither  this  Plan  nor  any action  taken  hereunder  shall  be
construed as giving to any employee or participant the  right  to
be retained in the employ of American or an Affiliate.

Nothing  in  the  Plan shall be deemed to give any  employee  any
right, contractually or otherwise, to participate in the Plan  or
in any benefits hereunder, other than the right to

                                  4

 5
receive  payment  of  such  award  as  may  have  been  expressly
determined by the Committee.

In  the  event of any act of God, war, natural disaster, aircraft
grounding,   revocation  of  operating  certificate,   terrorism,
strike, lockout, labor dispute, work stoppage, fire, epidemic  or
quarantine  restriction,  act of government,  critical  materials
shortage,  or  any  other  act beyond the  control  of  American,
whether  similar or dissimilar,  (each a "Force Majeure  Event"),
which Force Majeure Event affects American or its Subsidiaries or
its  Affiliates, the Committee, in its sole discretion,  may  (i)
terminate or (ii) suspend, delay, defer (for such period of  time
as  the Committee may deem necessary), or substitute any payments
due currently or in the future under the Plan, including, but not
limited  to,  any payments that have accrued to  the  benefit  of
participants but have not yet been paid.

In  consideration of the employee's privilege to  participate  in
the  Plan,  the  employee agrees (i) not to  disclose  any  trade
secrets  of,  or  other confidential/restricted  information  of,
American or its Affiliates to any unauthorized party (ii) not  to
make  any  unauthorized use of such trade secrets or confidential
or  restricted  information during his  or  her  employment  with
American   or   its  Affiliates  or  after  such  employment   is
terminated,  and  (iii) not to solicit any current  employees  of
American or any subsidiaries of AMR to join the employee  at  his
or  her new place of employment after his or her employment  with
American or its Affiliates is terminated.

The  Committee may amend, suspend, or terminate the Plan  at  any
time.

                                 5

 1

                                            Exhibit 10.9
                2002 INCENTIVE COMPENSATION PLAN
                 FOR OFFICERS AND KEY EMPLOYEES


Purpose

The  purpose of the 2002 American Airlines Incentive Compensation
Plan  ("Plan")  for  officers and key  employees  is  to  provide
greater  incentive  to  officers and key  employees  of  American
Airlines,  Inc.  to  achieve  the  highest  level  of  individual
performance  and  to meet or exceed specified  goals  which  will
contribute to the success of American.


Definitions

Capitalized terms not otherwise defined in the Plan will have the
meanings  set  forth  in the 1998 Long Term  Incentive  Plan,  as
amended (the "LTIP").

"AMR" is defined as AMR Corporation.

"Aggregate Target Awards" is defined as the arithmetic sum of the
Target Awards for all Plan participants.

"Affiliate" is defined as a subsidiary of AMR or any entity  that
is  designated by the Committee as a participating employer under
the  Plan, provided that AMR directly or indirectly owns at least
20%  of the combined voting power of all classes of stock of such
entity.

"American"  is  defined as AMR less AMR subsidiaries  other  than
American Airlines, Inc. and its subsidiaries.

"Committee"  is defined as the Compensation/Nominating  Committee
of the AMR Board of Directors.

"Competitors"  is  defined  as Continental  Airlines,  Delta  Air
Lines, Northwest Airlines, United Air Lines and US Airways.

"DOT Rank" is defined as American's relative rank with respect to
the  Competitors  in  the  category  of  arrivals+14  (A+14)   as
determined by the U.S. Department of Transportation (DOT).   This
cumulative ranking is based on DOT's aggregated A+14 data for the
period December 1, 2001 through November 30, 2002, inclusive.  To
the extent that at any point during the year a carrier ceases  to
participate, it will be excluded from the entire year.

                                 1
 2

"Engagement  Scores" is defined as American's overall  engagement
score on the employee opinion survey and American's rating versus
the National Norm, each reported as a percent annually.

"Fund"  is  defined as the incentive compensation fund,  if  any,
accumulated in accordance with this Plan.

  "Measure"  is  defined as Net Income, DOT Rank, Survey  America
Rank, or Engagement Score.

"Named Executive Officers" is defined as the officers of American
who  are  named in the AMR proxy statement for the year in  which
awards under the Plan are paid.

"National  Norm" is defined as a national sample of employees  in
firms with 1,000 or more employees.

"Net   Income"  is  AMR  net  income  including  any   accounting
adjustments or extraordinary or unusual items which may be  added
or deducted by the Committee.

"Qualified Earnings" is defined as base pay as of December 31  of
the  Plan year, holiday pay, sick pay, and vacation pay, but does
not include such things as travel and incidental expenses, moving
expenses,   relocation  allowance  (COLA),   payouts   from   any
retirement   plan,  disability  payments,  workers   compensation
payments,  imputed income from certain travel service charges  or
life  insurance, or other benefits provided by American, nor does
it  include any special monetary awards or allowances,  lump  sum
payments, or incentive compensation or profit sharing payments.

"Survey America Rank" is defined as American's relative rank with
respect  to  its  Competitors  in the  categories  of   "Retained
Preference",   "Overall  Travel  Experience",   "Overall   Ground
Service", and "Overall On-Board Services" in the coach  cabin  as
reported  in  Plog  Inc.'s Survey America.   The  Survey  America
ranking  is  based  on  cumulative  data  for  American  and  the
Competitors for the period October 1, 2001 through September  30,
2002, inclusive.  To the extent that at any point during the year
a  carrier  ceases to participate, it will be excluded  from  the
entire year.

"Target Award" is defined as the award (stated as a percentage of
Qualified  Earnings)  for  an eligible  participant  when  target
levels  are  achieved  on  all Measures.   The  Target  Award  is
determined by the participant's job level.


Eligibility for Participation

In order to be eligible to participate in the Plan, an individual
must  be  an officer or key employee (as designated by American's
Chairman and CEO) of American.  Additionally, the individual must
have been employed by American or an Affiliate as an

                                2
 3

officer  or  key  employee for at least three consecutive  months
during  the Plan year.  The three months service requirement  may
be  waived  in cases of retirement in accordance with  American's
then applicable pension plan, prior to completing three months of
service.

During  a  Plan  year, individuals with less than  twelve  months
eligibility  in  the Plan may be eligible to participate  in  the
Plan on a pro rata basis, at the discretion of the Committee.  In
addition,   the   Committee,  at  its  discretion,   may   permit
participation  by  officers and key employees of  Affiliates  who
have  been  so  employed  by the Affiliate  for  at  least  three
consecutive months during the Plan year.

Notwithstanding the forgoing, however, an officer or key employee
will  not be eligible to participate in the Plan if such  officer
or  key employee is, at the same time, eligible to participate in
a   commission,   incentive,  profit  sharing  or   other   bonus
compensation  program  sponsored by  American  or  an  Affiliate,
unless the Committee otherwise decides.

In  order to receive an award under the Plan, an individual  must
satisfy  the aforementioned eligibility requirements and must  be
an  employee  of American or an Affiliate at the  time  an  award
under the Plan is paid.  If at the time awards are paid under the
Plan, an individual has retired from American or an Affiliate, is
on  leave  of absence with reinstatement rights, is disabled,  or
has  died,  the award which the individual otherwise  would  have
received   under  the  Plan  but  for  such  retirement,   leave,
disability,  or death may be paid to the individual,  or  his/her
estate in the event of death, at the discretion of the Committee.


The Incentive Compensation Fund

The  Fund  is comprised of three components: financial,  employee
and  customer.  The employee and customer components have various
Measures  (see below).  Each Measure has a threshold (performance
below  this  level earns no award), target and maximum percentage
of Aggregate Target Awards that may be earned, as follows:

     Component             Threshold Target    Maximum
     Financial              16.50%     66%       132%
     Employee                8.50%     17%        34%
     Customer               12.75%     17%        34%

          Total             37.75%    100%       200%

For  each  Measure, the Fund will accumulate on  a  linear  basis
between each of the points defined in the following tables.

                              3
 4

Financial Measure:

The financial measure is based on Net Income.  At a threshold Net
Income  of  $125  million,  the Fund will  accumulate  16.50%  of
Aggregate  Target  Awards.  Higher Net  Incomes  will  result  in
higher percentages of Aggregate Target Awards as follows:



               Net Income         % of Target Awards Earned
               $  125                       16.50%
               $  310                       33.00%
               $  495                       49.50%
               $  680                       66.00%
               $  935                       99.00%
               $1,190                      132.00% (Max)


Employee Measures:

The employee measures will depend on Engagement Scores.

                                           Threshold      Target     Maximum
          Engagement Score                      5%          10%       20%
          Engagement versus National Norm     3.5%           7%       14%

            Total                             8.5%          17%       34%

At a threshold Engagement Score of 72%, the Fund will accumulate
5% of Aggregate Target Awards.  Higher scores will result in
higher percentages of Aggregate Target Awards, as follows:

          Engagement Score         % of Target Awards Earned
               72%                           5.00%
               73%                           7.50%
               74%                          10.00%
               75%                          15.00%
               76%                          20.00% (Max)

At  a  threshold Engagement Score of 7% below National Norm,  the
Fund  will  accumulate 3.5% of Aggregate Target  Awards.   Higher
scores  will  result  in higher percentages of  Aggregate  Target
Awards, as follows:

         Percent below National Norm   % of Target Awards Earned
                    7%                        3.50%
                    6%                        5.25%
                    5%                        7.00%
                    4%                       10.50%
                    3%                       14.00% (Max)

                                 4

 5
In  the event the Employee Opinion Survey is not conducted during
the  plan  year  measured, AA's Engagement Score  and  Engagement
versus the National Norm will be calculated at target.


Customer Measures:

Customer Measures will depend on DOT Rank and Survey America
Rank.  Each of the five components (retained preference, overall
travel experience, overall ground service, overall on-board
service and DOT A+14 rankings) is measured separately.  For each
Measure, at a threshold rank of fourth, the fund will accumulate
2.55% of Aggregate Target Awards.  A higher rank will result in
higher percentages of Aggregate Target Awards, as follows:

               Rank                % of Target Awards Earned
               Fourth                            2.55%
               Third                             3.40%
               Second                            5.10%
               First                             6.80% (Max)


The following scorecard illustrates this.



2002 Incentive Plan
     Scorecard
                                                         
                         Threshold                    Target           Maximum   Example
Measures            Weight  25%    50%         75%    100%      150%     200%    Score 1/
Shareholder
- - AMR net income     66%   $125M  $310M      $495M    $680M    $935M   $1,190M    66.00%


                                Threshold             Target           Maximum    Example
                     Weight  25%    50%         75%    100%     150%     200%      Score
Employee
- - engagement score
  on opinion survey   10%    n/a    72%         73%    74%       75%      76%      5.00%
- - AA engagement vs.
  national norm       7%    n/a     7% below 6% below 5% below 4% below 3% below   5.25%
                     17%                                                          10.25%
                                               Threshold  Target           Maximum Example
                        Weight   25%    50%        75%     100%     150%     200%   Score
Customer
- -retained preference     3.4%    n/a    n/a        4th     3rd      2nd      1st    3.40%
- -overall  travel
 experience              3.4%    n/a    n/a        4th     3rd      2nd      1st    2.55%
- -overall ground service  3.4%    n/a    n/a        4th     3rd      2nd      1st    2.55%
- -overall on-board
 services                3.4%    n/a    n/a        4th     3rd      2nd      1st    5.10%
- -DOT A+14 ratings        3.4%    n/a    n/a        4th     3rd      2nd      1st    3.40%
                          17%                                                      17.00%

Fund as a % of Target                                                              93.25%


1/ Based on performance results in shaded areas
5 6 Allocation of Individual Awards The Chairman and CEO of American, in consultation with the Vice- Chairman, executive and senior vice presidents of American, will determine awards for non-officer eligible employees based upon the eligible employee's performance. Unless otherwise determined by the Chairman, an award under the Plan to a non-officer eligible employee, when combined with any other award for the Plan year whether such other award is under an incentive compensation, commission, profit sharing or other bonus compensation plan, may not exceed 100% of such eligible employee's base salary. The Committee, in consultation with the Chairman and CEO of American, will determine awards for officers of American, including the Named Executive Officers. The awards for officers (other than the Named Executive Officers) will be equal to the appropriate Target Award, plus or minus any adjustments for individual performance. To the extent that an award to a Named Executive Officer includes a partial payment relating to a Measure (other than Net Income), such partial payment will be paid from the general operating funds of American. An award under the Plan to an officer may not exceed the amount set forth in Section 11 of the LTIP. The aggregate of all awards paid hereunder will not exceed the lesser of: (2.0 times the Fund at Aggregate Target Awards) or (50% of the total base salaries of all eligible participants in the Plan). In the discretion of the Committee, the Fund may not be fully distributed. Administration The Committee shall have authority to administer and interpret the Plan, establish administrative rules, approve eligible participants, and take any other action necessary for the proper and efficient operation of the Plan. For participants other than the Named Executive Officers, the Committee reserves the right to adjust the calculation of each Measure at its discretion. Notwithstanding anything to the contrary contained herein, no awards will be made under the Plan unless awards are also made under the 2002 American Airlines Employee Profit Sharing Plan and the 2002 Pilot Variable Compensation Plan for members of the Allied Pilots Association. The amount, if any, of the Fund shall be audited by the General Auditor of American based on a certification of Net Income by AMR's independent auditors. A summary of awards under the Plan shall be provided to the Committee at the first regular meeting following determination of the awards. To the extent a Measure is no longer compiled by the DOT, Survey America, or American as applicable, during a Plan year, the Committee will substitute a comparable performance measure for the remainder of the Plan year. 6 7 Method of Payment The Committee will determine the method of payment of awards. Except as provided herein, awards shall be paid as soon as practicable after audited financial statements for the year 2002 are available. Individuals, except retirees, may elect to defer their awards into a deferred compensation program, if any, administered by American or AMR. General Neither this Plan nor any action taken hereunder shall be construed as giving any employee or participant the right to be retained in the employ of American or an Affiliate. Nothing in the Plan shall be deemed to give any employee any right, contractually or otherwise, to participate in the Plan or in any benefits hereunder, other than the right to receive payment of such incentive compensation as may have been expressly awarded by the Committee. In the event of any act of God, war, natural disaster, aircraft grounding, revocation of operating certificate, terrorism, strike, lockout, labor dispute, work stoppage, fire, epidemic or quarantine restriction, act of government, critical materials shortage, or any other act beyond the control of American, whether similar or dissimilar, (each a "Force Majeure Event"), which Force Majeure Event affects American or its subsidiaries or its Affiliates, the Committee in its sole discretion, may (i) terminate or (ii) suspend, delay, defer (for such period of time as the Committee may deem necessary), or substitute any payments due currently or in the future under the Plan, including, but not limited to, any payments that have accrued to the benefit of participants but have not yet been paid. In consideration of the employee's privilege to participate in the Plan, the employee agrees (i) not to disclose any trade secrets of, or other confidential/restricted information of, American or its Affiliates to any unauthorized party and (ii) not to make any unauthorized use of such trade secrets or confidential or restricted information during his or her employment with American or its Affiliates or after such employment is terminated, and (iii) not to solicit any current employees of American or any subsidiaries of AMR to join the employee at his or her new place of employment after his or her employment with American or its Affiliates is terminated. The Committee may amend, suspend, or terminate the Plan at any time. 7
 1
                                              Exhibit 10.10
               2002 - 2004 PERFORMANCE SHARE PLAN
                 FOR OFFICERS AND KEY EMPLOYEES

Purpose

The  purpose of the 2002 - 2004 AMR Corporation Performance Share
Plan  ("Plan")  for  Officers and Key  Employees  is  to  provide
greater   incentive  to  officers  and  key  employees   of   the
subsidiaries  and affiliates of AMR Corporation  ("AMR"  or  "the
Corporation")   to  achieve  the  highest  level  of   individual
performance  and  to meet or exceed specified  goals  which  will
contribute  to  the  success of the Corporation.   This  Plan  is
adopted pursuant to the 1998 Long Term Incentive Plan, as amended
("LTIP").

Definitions

Capitalized terms not otherwise defined in the Plan or the  award
agreement for performance shares between the Corporation and  the
employee, will have the meanings set forth in the LTIP.

For purposes of the Plan, the following definitions will control:

"Affiliate" is defined as a subsidiary of AMR or any entity that
is designated by the Committee as a participating employer under
the Plan, provided that AMR directly or indirectly owns at least
20% of the combined voting power of all classes of stock of such
entity.

"Committee"   is  defined  as  the  Compensation   /   Nominating
Committee, or its successor, of the AMR Board of Directors.

"Comparator Group" is defined as the seven major U.S. based
carriers including AMR Corporation, Continental Airlines, Inc.,
Delta Air Lines, Inc., Northwest Airlines Corp., Southwest
Airlines Co., UAL Corporation, and US Airways Group, Inc.

"Measurement  Period"  is  defined  as  the  three  year   period
beginning January 1, 2002 and ending December 31, 2004.

"Total Shareholder Return (TSR)" is defined as the rate of return
reflecting stock price appreciation plus reinvestment of
dividends over the Measurement Period.  The average Daily Closing
Stock Price (adjusted for splits and dividends) for the three
months prior to the beginning and ending points of the
Measurement Period will be used to smooth out market
fluctuations.

"Daily Closing Stock Price" is defined as the stock price at the
close of trading (4:00 PM EST) of the National Exchange on which
the stock is traded.

                               1

 2
"National Exchange" is defined as either the New York Stock
Exchange (NYSE), the National Association of Stock Dealers and
Quotes (NASDAQ), or the American Stock Exchange (AMEX).

Accumulation of Shares

The  number  of  shares  under the  Plan  to  be  distributed  to
individual  participants is determined by (i)  the  Corporation's
TSR  rank  within  the Comparator Group and (ii)  the  terms  and
conditions of the award agreement between the Corporation and the
employee.  The distribution percentage of target shares, based on
rank, is specified below:

         Granted Shares - Percent of Target Based on Rank

 Rank      7        6        5        4       3        2       1
Payout%    0%      25%      50%      75%     100%    135%    175%


In the event that a carrier (or carriers) in the Comparator Group
ceases  to  trade  on a National Exchange at  any  point  in  the
Measurement  Period,  the  following distribution  percentage  of
target  shares,  based  on  rank  and  the  number  of  remaining
comparators, will be used accordingly.

                          6 Comparators

     Granted Shares - Percent of Target Based on Rank

 Rank      6        5        4        3       2       1
Payout%    0%      50%      75%     100%     135%    175%

                          5 Comparators

Granted Shares - Percent of Target Based on Rank

 Rank      5        4        3        2      1
Payout%   50%      75%     100%     135%    175%

                          4 Comparators

Granted Shares - Percent of Target Based
                 on Rank

 Rank      4        3        2       1
Payout%   75%     100%     135%     175%

                               2

 3
                          3 Comparators

  Granted Shares - Percent of Target Based on Rank

  Rank        3         2         1
Payout %     50%      135%      175%

Administration

The  Committee  shall have authority to administer and  interpret
the   Plan,  establish  administrative  rules,  approve  eligible
participants, and take any other action necessary for the  proper
and efficient operation of the Plan.  The distribution percentage
of  shares, if any, will be determined based on an audit of AMR's
TSR  Rank  by the General Auditor of American Airlines,  Inc.   A
summary  of awards under the Plan shall be provided to the  Board
of Directors at the first regular meeting following determination
of  the  awards.   The  Committee may determine  to  pay  a  cash
equivalent in lieu of the stock award.

General

Neither  this  Plan  nor  any action  taken  hereunder  shall  be
construed as giving any employee or participant the right  to  be
retained  in  the  employ  of  American  Airlines,  Inc.  or   an
Affiliate.

Nothing  in  the  Plan shall be deemed to give any  employee  any
right, contractually or otherwise, to participate in the Plan  or
in  any  benefits hereunder, other than the right to  receive  an
award as may have been expressly awarded by the Committee subject
to  the  terms and conditions of the award agreement between  the
Corporation and the employee.

In  the  event of any act of God, war, natural disaster, aircraft
grounding,   revocation  of  operating  certificate,   terrorism,
strike, lockout, labor dispute, work stoppage, fire, epidemic  or
quarantine  restriction,  act of government,  critical  materials
shortage, or any other act beyond the control of the Corporation,
whether  similar or dissimilar,  (each a "Force Majeure  Event"),
which  Force  Majeure  Event  affects  the  Corporation  or   its
subsidiaries  or  its  Affiliates, the  Committee,  in  its  sole
discretion, may (i) terminate or (ii) suspend, delay, defer  (for
such  period  of  time as the Committee may deem  necessary),  or
substitute  any awards due currently or in the future  under  the
Plan, including, but not limited to, any awards that have accrued
to the benefit of participants but have not yet been paid.

In  consideration of the employee's privilege to  participate  in
the  Plan,  the  employee agrees (i) not to  disclose  any  trade
secrets  of,  or  other confidential/restricted  information  of,
American  Airlines,  Inc. or its Affiliates to  any  unauthorized
party  and,  (ii) not to make any unauthorized use of such  trade
secrets or confidential or restricted

                               3
 4

information during his or her employment with American  Airlines,
Inc.  or  its  Affiliates or after such employment is terminated,
and  (iii)  not  to  solicit any current  employees  of  American
Airlines, Inc. or any subsidiaries of AMR to join the employee at
his  or  her  new place of employment after his or her employment
with American Airlines, Inc. is terminated.

The  Committee may amend, suspend, or terminate the Plan  at  any
time.























                                 4

 1                                             Exhibit 10.11
               2002 - 2004 PERFORMANCE SHARE PROGRAM
                  DEFERRED STOCK AWARD AGREEMENT


       This  AGREEMENT  made  as  of  Date,  by  and  between  AMR
Corporation, a Delaware corporation (the "Corporation"), and First
Last (the "Employee"), employee number 999999.

      WHEREAS,  the stockholders of the Corporation  approved  the
1998  Long Term Incentive Plan at the Corporation's annual meeting
held  on  May 20, 1998 (such plan, as may be amended from time  to
time, to be referenced the "1998 Plan"); and

     WHEREAS,  pursuant  to  the Performance  Share  Program  (the
"Program")  adopted by the Board of Directors of  the  Corporation
(the "Board"), the Board has determined to make a Program grant to
the  Employee of Deferred Stock (subject to the terms of the  1998
Plan  and  this Agreement), as an inducement for the  Employee  to
remain  an  employee  of  the  Corporation  (or  a  Subsidiary  or
Affiliate  thereof),  and  to retain and  motivate  such  Employee
during such employment.

     NOW, THEREFORE, the Corporation and the Employee hereby agree
as follows:

      1.    Grant of Award.  The Employee is hereby granted as  of
Date,  (the  "Grant Date") a Deferred Stock Award  (the  "Award"),
subject  to  the terms and conditions hereinafter set forth,  with
respect to shares shares of Common Stock, $1.00 par value, of  the
Corporation ("Stock").  The shares of Stock covered by  the  Award
shall vest, if at all, in accordance with Section 2.

     2.   Vesting.

     (a)   The  Award  will  vest, if at all, in  accordance  with
Schedule A, attached hereto and made a part of this Agreement.

     (b)  In the event of the termination of Employee's employment
with  the Corporation (or a Subsidiary or Affiliate thereof) prior
to  the end of three year measurement period set forth in Schedule
A   (the  "Measurement  Period")  due  to  the  Employee's  death,
Disability,  Retirement  or termination not  for  Cause  (each  an
"Early  Termination") the Award will vest, if at all, on a prorata
basis  and will be paid to the Employee (or, in the event  of  the
Employee's  death,  the  Employee's  designated  beneficiary   for
purposes  of  the  Award,  or  in  the  absence  of  an  effective
beneficiary  designation,  the  Employee's  estate)  as  soon   as
practicable after the end of the Measurement Period.  The  prorata
share  will  be a percentage where the denominator is 36  and  the
numerator is the number of months from January 1, 2002 through the
month of the Early Termination, inclusive.

                                1

 2

     (c)  In the event of the termination of Employee's employment
with the Corporation (or any Subsidiary or Affiliate thereof)  for
Cause,  or if the Employee terminates his/her employment with  the
Corporation (or any Subsidiary or Affiliate thereof) prior to  the
distribution of any Award hereunder, the Award shall be  forfeited
in its entirety.

      (d)  In the event of a Change in Control or Potential Change
in  Control of the Corporation, the Award shall vest in accordance
with the 1998 Plan, or its successor.

     (e)  If prior to the distribution of any Award hereunder, the
Employee  becomes an employee of a Subsidiary that is  not  wholly
owned, directly or indirectly, by the Corporation, then the  Award
shall be forfeited in its entirety.

     (f)  If prior to the distribution of any Award hereunder, the
Employee  takes  a leave of absence without reinstatement  rights,
and unless otherwise agreed in writing between the Corporation and
the Employee, then the Award shall be forfeited in its entirety.

      3.   Payment in Cash.  Upon a determination by the Board, an
Award  may  be  paid in cash or other consideration in  accordance
with a formula as adopted by the Board.

      4.    Elective  Deferrals.  At any time at least  12  months
prior to the end of the Measurement Period, the Employee may elect
in writing, subject to approval by the Corporation, to voluntarily
defer  the receipt of the Stock for a specified additional  period
beyond  the end of the Measurement Period (the "Elective  Deferral
Period").  Any Stock deferred pursuant to this Section 4 shall  be
issued  to  the  Employee within 60 days  after  the  end  of  the
Elective  Deferral  Period.  In the event  of  the  death  of  the
Employee  during  the  Elective  Deferral  Period,  the  Stock  so
deferred  shall be issued to the Employee's designated Beneficiary
(or  to  the  Employee's estate, in the absence  of  an  effective
beneficiary  designation)  within 60 days  after  the  Corporation
receives written notification of death.

      5.    Transfer Restrictions.  This Award is non-transferable
otherwise than by will or by the laws of descent and distribution,
and  may  not  otherwise be assigned, pledged or hypothecated  and
shall  not be subject to execution, attachment or similar process.
Upon  any attempt by the Employee (or the Employee's successor  in
interest   after  the  Employee's  death)  to  effect   any   such
disposition, or upon the levy of any such process, the  Award  may
immediately become null and void, at the discretion of the Board.

                              2
 3

     6.   Miscellaneous.  This Agreement (a) shall be binding upon
and  inure to the benefit of any successor of the Corporation, (b)
shall  be  governed  by the laws of the State  of  Texas  and  any
applicable  laws of the United States, and (c) may not be  amended
without  the  written  consent of both  the  Corporation  and  the
Employee.  No contract or right of employment shall be implied  by
this  Agreement.  In the event Employee does not  forward  to  the
Corporation,  within  the applicable period, required  taxes  with
respect  to any Award distributed pursuant to this Agreement,  the
Corporation  may  withhold from any payments to  be  made  to  the
Employee  by  the  Corporation  (or any  Subsidiary  or  Affiliate
thereof), an amount(s) equal to such taxes.

      7.   Securities Law Requirements.  The Corporation shall not
be required to issue Stock pursuant to this Award unless and until
(a) such shares have been duly listed upon each stock exchange  on
which  the  Corporation's  Stock is  then  registered  and  (b)  a
registration  statement  under the Securities  Act  of  1933  with
respect to such shares is then effective.

      The  Board  may  require  the Employee  to  furnish  to  the
Corporation, prior to the issuance of the Stock in connection with
this  Award, an agreement, in such form as the Board may from time
to  time  deem appropriate, in which the Employee represents  that
the  shares  acquired  under  the Award  are  being  acquired  for
investment  and  not  with  a view to  the  sale  or  distribution
thereof.

      8.    Incorporation of 1998 Plan Provisions.  This Agreement
is  made  pursuant to the 1998 Plan and is subject to all  of  the
terms  and  provisions of the 1998 Plan as if the same were  fully
set  forth herein.  Capitalized terms not otherwise defined herein
(inclusive  of Schedule A) shall have the meanings set  forth  for
such terms in the 1998 Plan.

       IN  WITNESS  HEREOF,  the  Corporation  has  executed  this
Performance  Share  Grant  as of the  day  and  year  first  above
written.



EMPLOYEE                              AMR CORPORATION



_____________________________         _____________________
                                      Charles D. MarLett
                                    Corporate Secretary












                               3


 4
                            Schedule A
                2002 - 2004 PERFORMANCE SHARE PLAN
                  FOR OFFICERS AND KEY EMPLOYEES

Purpose

The  purpose of the 2002 - 2004 AMR Corporation Performance  Share
Plan ("Plan") for Officers and Key Employees is to provide greater
incentive  to  officers and key employees of the subsidiaries  and
affiliates  of  AMR  Corporation ("AMR" or "the  Corporation")  to
achieve the highest level of individual performance and to meet or
exceed specified goals which will contribute to the success of the
Corporation.  This Plan is adopted pursuant to the 1998 Long  Term
Incentive Plan, as amended ("LTIP").

Definitions

Capitalized terms not otherwise defined in the Plan or  the  award
agreement for performance shares between the Corporation  and  the
employee, will have the meanings set forth in the LTIP.

For purposes of the Plan, the following definitions will control:

"Affiliate" is defined as a subsidiary of AMR or any entity that
is designated by the Committee as a participating employer under
the Plan, provided that AMR directly or indirectly owns at least
20% of the combined voting power of all classes of stock of such
entity.

"Committee" is defined as the Compensation / Nominating Committee,
or its successor, of the AMR Board of Directors.

"Comparator Group" is defined as the seven major U.S. based
carriers including AMR Corporation, Continental Airlines, Inc.,
Delta Air Lines, Inc., Northwest Airlines Corp., Southwest
Airlines Co., UAL Corporation, and US Airways Group, Inc.

"Measurement Period" is defined as the three year period beginning
January 1, 2002 and ending December 31, 2004.

"Total Shareholder Return (TSR)" is defined as the rate of return
reflecting stock price appreciation plus reinvestment of dividends
over the Measurement Period.  The average Daily Closing Stock
Price (adjusted for splits and dividends) for the three months
prior to the beginning and ending points of the Measurement Period
will be used to smooth out market fluctuations.

"Daily Closing Stock Price" is defined as the stock price at the
close of trading (4:00 PM EST) of the National Exchange on which
the stock is traded.


 5

"National Exchange" is defined as either the New York Stock
Exchange (NYSE), the National Association of Stock Dealers and
Quotes (NASDAQ), or the American Stock Exchange (AMEX).

Accumulation of Shares

     The  number  of  shares under the Plan to be  distributed  to
individual participants is determined by (i) the Corporation's TSR
rank within the Comparator Group and (ii) the terms and conditions
of  the  award agreement between the Corporation and the employee.
The  distribution percentage of target shares, based on  rank,  is
specified below:

         Granted Shares - Percent of Target Based on Rank

 Rank      7        6        5        4       3        2       1
Payout%    0%      25%      50%      75%     100%    135%    175%


In  the event that a carrier (or carriers) in the Comparator Group
ceases  to  trade  on  a National Exchange at  any  point  in  the
Measurement  Period,  the  following  distribution  percentage  of
target   shares,  based  on  rank  and  the  number  of  remaining
comparators, will be used accordingly.

                           6 Comparators

     Granted Shares - Percent of Target Based on Rank

 Rank      6        5        4        3       2       1
Payout%    0%      50%      75%     100%     135%    175%

                           5 Comparators

Granted Shares - Percent of Target Based on Rank

 Rank      5        4        3        2      1
Payout%   50%      75%     100%     135%    175%

                           4 Comparators

Granted Shares - Percent of Target Based on Rank

 Rank      4        3        2       1
Payout%   75%     100%     135%     175%

                               5

 6

                           3 Comparators

  Granted Shares - Percent of Target Based on Rank

  Rank        3         2         1
Payout%      50%      135%      175%

Administration

The Committee shall have authority to administer and interpret the
Plan,    establish   administrative   rules,   approve    eligible
participants, and take any other action necessary for  the  proper
and  efficient operation of the Plan.  The distribution percentage
of  shares, if any, will be determined based on an audit of  AMR's
TSR  Rank  by  the General Auditor of American Airlines,  Inc.   A
summary of awards under the Plan shall be provided to the Board of
Directors at the first regular meeting following determination  of
the  awards.  The Committee may determine to pay a cash equivalent
in lieu of the stock award.

General

Neither  this  Plan  nor  any  action  taken  hereunder  shall  be
construed  as giving any employee or participant the right  to  be
retained in the employ of American Airlines, Inc. or an Affiliate.

Nothing  in  the  Plan shall be deemed to give  any  employee  any
right,  contractually or otherwise, to participate in the Plan  or
in  any  benefits hereunder, other than the right  to  receive  an
award  as may have been expressly awarded by the Committee subject
to  the  terms and conditions of the award agreement  between  the
Corporation and the employee.

In  the  event of any act of God, war, natural disaster,  aircraft
grounding, revocation of operating certificate, terrorism, strike,
lockout,   labor  dispute,  work  stoppage,  fire,   epidemic   or
quarantine  restriction,  act  of government,  critical  materials
shortage,  or any other act beyond the control of the Corporation,
whether  similar  or dissimilar,  (each a "Force Majeure  Event"),
which   Force  Majeure  Event  affects  the  Corporation  or   its
subsidiaries  or  its  Affiliates,  the  Committee,  in  its  sole
discretion, may (i) terminate or (ii) suspend, delay,  defer  (for
such  period  of  time  as the Committee may deem  necessary),  or
substitute  any  awards due currently or in the future  under  the
Plan,  including, but not limited to, any awards that have accrued
to the benefit of participants but have not yet been paid.

In consideration of the employee's privilege to participate in the
Plan,  the  employee agrees (i) not to disclose any trade  secrets
of,  or  other  confidential/restricted information  of,  American
Airlines,  Inc. or its Affiliates to any unauthorized  party  and,
(ii)  not  to make any unauthorized use of such trade  secrets  or
confidential  or  restricted  information  during   his   or   her
employment with American Airlines, Inc. or its Affiliates or after
such  employment  is  terminated, and (iii)  not  to  solicit  any
current  employees of American Airlines, Inc. or any  subsidiaries
of  AMR to join the employee at his or her new place of employment
after  his  or  her  employment with American  Airlines,  Inc.  is
terminated.

The  Committee may amend, suspend, or terminate the  Plan  at  any
time.



 1
                                                     Exhibit 10.12
                           STOCK OPTION


      STOCK  OPTION granted Date, by AMR Corporation,  a  Delaware
corporation  (the "Corporation"), and First Last, employee  number
999999,  an employee of the Corporation or one of its Subsidiaries
or Affiliates (the "Optionee").

                       W I T N E S S E T H:

      WHEREAS,  the stockholders of the Corporation  approved  the
1998  Long Term Incentive Plan at the Corporation's annual meeting
held  on  May 20, 1998 (such plan, as may be amended from time  to
time, to be referenced the "1998 Plan");

     WHEREAS, the 1998 Plan provides for the grant of an option to
purchase  shares  of  the  Corporation's  Common  Stock  to  those
individuals  selected by the Committee or, in  lieu  thereof,  the
Board of Directors of AMR Corporation (the "Board"); and

      WHEREAS,  the  Board  has determined that  the  Optionee  is
eligible  under  the  Plan and that it is  to  the  advantage  and
interest  of  the  Corporation to grant the  option  provided  for
herein  to the Optionee as an incentive for Optionee to remain  in
the  employ  of  the  Corporation or one of  its  Subsidiaries  or
Affiliates,  and  to encourage ownership by the  Optionee  of  the
Corporation's Common Stock, $1 par value (the "Common Stock").

     NOW, THEREFORE:

      1.   Option  Grant.  The Corporation hereby  grants  to  the
Optionee  a non-qualified stock option, subject to the  terms  and
conditions hereinafter set forth, to purchase all or any  part  of
an aggregate of xxxx shares of Common Stock at a price of
$xx.xxxx  per  share (being the fair market value  of  the  Common
Stock  on  the  date  hereof), exercisable in approximately  equal
installments on and after the following dates and with respect  to
the following number of shares of Common Stock:

 Exercisable On and After           Number of Shares
        07/23/2002                         XXX
        07/23/2003                         XXX
        07/23/2004                         XXX
        07/23/2005                         XXX
        07/23/2006                         XXX

                                   1
 2
provided,  that  in no event shall this option be  exercisable  in
whole  or  in  part ten years from the date hereof  and  that  the
Corporation  shall  in no event be obligated to  issue  fractional
shares.   The  right to exercise this option and to  purchase  the
number  of  shares  comprising  each  such  installment  shall  be
cumulative, and once such right has become exercisable it  may  be
exercised in whole at any time and in part from time to time until
the date of termination of the Optionee's rights hereunder.

      2.    Restriction  on Exercise.  Notwithstanding  any  other
provision  hereof, this option shall not be exercised if  at  such
time  such  exercise or the delivery of certificates  representing
shares  of Common Stock purchased pursuant hereto shall constitute
a  violation of any rule of the Corporation, any provision of  any
applicable  Federal or State statute, rule or regulation,  or  any
rule  or regulation of any securities exchange on which the Common
Stock may be listed.

      3.    Manner of Exercise.  This option may be exercised with
respect  to  all  or any part of the shares of Common  Stock  then
subject  to such exercise pursuant to whatever procedures  may  be
adopted by the Corporation.  In the event that at the time of such
exercise  the  shares of Common Stock as to which this  option  is
exercisable have not been registered under the Securities  Act  of
1933, the Optionee will make a representation that he is acquiring
the shares of Common Stock for investment only and not with a view
to  distribution. Subject to compliance by the Optionee  with  all
the  terms  and conditions hereof, the Corporation  or  its  agent
shall promptly thereafter deliver to the Optionee a certificate or
certificates  for such shares with all requisite  transfer  stamps
attached.   (In the event of a cashless exercise, the  Corporation
or its agent will pay to the Optionee the appropriate cash amount,
less required withholdings.)

      4.   Termination of Option.  This option shall terminate and
may  no  longer be exercised if (i) the Optionee ceases to  be  an
employee  of  the  Corporation  or  one  of  its  Subsidiaries  or
Affiliates;  or  (ii)  the  Optionee  becomes  an  employee  of  a
Subsidiary  that is not wholly owned, directly or  indirectly,  by
the  Corporation; or (iii) the Optionee takes a leave  of  absence
without  reinstatement rights, unless otherwise agreed in  writing
between the Corporation and the Optionee; except that

     (a)   If  the Optionee's employment by the Corporation  (and
any  Subsidiary or Affiliate) terminates by reason of death,  the
vesting  of  the option will be accelerated and the  option  will
remain exerciseable until its expiration;


                                  2
 3
     (b)   If  the Optionee's employment by the Corporation  (and
any  Subsidiary or Affiliate) terminates by reason of Disability,
the option will continue to vest in accordance with its terms and
may be exercised until its expiration; provided, however, that if
the Optionee dies after such Disability the vesting of the option
will be accelerated and the option will remain exerciseable until
its expiration;

     (c)   Subject to Section 7(c), if the Optionee's  employment
by  the  Corporation (and any Subsidiary or Affiliate) terminates
by reason of Normal or Early Retirement, the option will continue
to  vest in accordance with its terms and may be exercised  until
its  expiration;  provided, however, that if  the  Optionee  dies
after  Retirement the vesting of the option will  be  accelerated
and the option will remain exerciseable until its expiration;

     (d)   If  the Optionee's employment by the Corporation  (and
any  Subsidiary or Affiliate) is involuntarily terminated by  the
Corporation  or a Subsidiary or Affiliate (as the  case  may  be)
without  Cause,  the option may thereafter be exercised,  to  the
extent  it  was  exercisable at the time of  termination,  for  a
period  of  three  months from the date of  such  termination  of
employment  or  until the stated term of such  option,  whichever
period is shorter; and

      (e)   In  the  event of a Change in Control or  a  Potential
Change  in  Control of the Corporation, this option  shall  become
exercisable in accordance with the 1998 Plan, or its successor.

      5.   Adjustments in Common Stock.  In the event of any stock
dividend,  stock  split,  merger,  consolidation,  reorganization,
recapitalization  or  other  change in  the  corporate  structure,
appropriate adjustments may be made by the Board in the number  of
shares, class or classes of securities and the price per share.

      6.    Non-Transferability of Option.  Unless  the  Committee
shall permit (on such terms and conditions as it shall establish),
an  option  may not be transferred except by will or the  laws  of
descent and distribution to the extent provided herein. During the
lifetime of the Optionee this option may be exercised only by  him
or her (unless otherwise determined by the Committee).

     7.   Miscellaneous.

     (a)   This option (i) shall be binding upon and inure to  the
benefit  of  any  successor  of the  Corporation,  (ii)  shall  be
governed  by  the laws of the State of Texas, and  any  applicable
laws of the United States, and (iii) may not be amended except  in
writing.   No contract or right of employment shall be implied  by
this option.

                                3

 4
     (b)  If this option is assumed or a new option is substituted
therefore  in  any  corporate reorganization (including,  but  not
limited  to,  any transaction of the type referred to  in  Section
425(a)  of  the  Internal  Revenue  Code  of  1986,  as  amended),
employment by such assuming or substituting corporation  or  by  a
parent corporation or a subsidiary thereof shall be considered for
all purposes of this option to be employment by the Corporation.

      (c)  In the event the Optionee's employment is terminated by
reason of Early or Normal Retirement and the Optionee subsequently
is  employed  by a competitor of the Corporation, the  Corporation
reserves  the right, upon notice to the Optionee, to  declare  the
option forfeited and of no further validity.

      8.   Securities Law Requirements.  The Corporation shall not
be  required  to  issue shares upon the exercise  of  this  option
unless  and until (a) such shares have been duly listed upon  each
stock   exchange  on  which  the  Corporation's  Stock   is   then
registered; and (b) a registration statement under the  Securities
Act of 1933 with respect to such shares is then effective.

      The  Board  may  require  the Optionee  to  furnish  to  the
Corporation,  prior  to the issuance of any  shares  of  Stock  in
connection with the exercise of this option, an agreement, in such
form as the Board may from time to time deem appropriate, in which
the  Optionee represents that the shares acquired by him upon such
exercise are being acquired for investment and not with a view  to
the sale or distribution thereof.

     9.   Option Subject to 1998 Plan.  This option shall be
subject to all the terms and provisions of the 1998 Plan and the
Optionee shall abide by and be bound by all rules, regulations and
determinations of the Board now or hereafter made in connection
with the administration of the 1998 Plan.  Capitalized terms not
otherwise defined herein shall have the meanings set forth for
such terms in the 1998 Plan.

      IN  WITNESS WHEREOF, the Corporation has executed this Stock
Option as of the day and year first above written.


                                   AMR Corporation



______________________________     ____________________________
Optionee                           Charles D. MarLett
                                   Corporate Secretary


                                 4

 1
                                                            Exhibit 12
                            AMR CORPORATION
           Computation of Ratio of Earnings to Fixed Charges
                             (in millions)
Three Months Ended June 30, Six Months Ended June 30, 2002 2001 2002 2001 Earnings: Loss before income taxes $(720) $ (793) $(1,583) $(850) Add: Total fixed charges (per below) 435 423 875 754 Less: Interest capitalized 22 38 44 79 Total loss $(307) $ (408) $ (752) $(175) Fixed charges: Interest, including interest capitalized $ 156 $ 126 $ 316 $ 240 Portion of rental expense representative of the interest factor 270 290 542 502 Amortization of debt expense 9 7 17 12 Total fixed charges $ 435 $ 423 $ 875 $ 754 Coverage deficiency $ 742 $ 831 $1,627 $ 929