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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
FORM
10-Q
[ü]Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
For
the Quarterly Period Ended March 31,
2008.
[ ]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 1-2691.
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American
Airlines, Inc.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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13-1502798
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(State
or other jurisdiction
of
incorporation or organization)
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(I.R.S.
Employer Identification No.)
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4333
Amon Carter Blvd.
Fort
Worth, Texas
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76155
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(817)
963-1234
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Not
Applicable
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(Former
name, former address and former fiscal year , if changed since last
report)
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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. þ Yes ¨ No
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Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition
of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the
Exchange Act. ¨ Large Accelerated
Filer ¨ Accelerated
Filer þ Non-accelerated
Filer
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Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). ¨
Yes þ No
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Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
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Common
Stock, $1 par value - 1,000 shares as of April 14,
2008.
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INDEX
AMERICAN
AIRLINES, INC.
PART
I:FINANCIAL INFORMATION
Item
1. Financial Statements
Consolidated
Statements of Operations -- Three months ended March 31, 2008 and
2007
Condensed
Consolidated Balance Sheets -- March 31, 2008 and December 31, 2007
Condensed
Consolidated Statements of Cash Flows -- Three months ended March 31, 2008 and
2007
Notes to
Condensed Consolidated Financial Statements -- March 31, 2008
Item
2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
Item
4. Controls and Procedures
PART
II:OTHER INFORMATION
Item
1. Legal Proceedings
Item
5. Other Information
Item
6. Exhibits
SIGNATURE
PART
I: FINANCIAL INFORMATION
Item
1. Financial
Statements
AMERICAN
AIRLINES, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited) (In
millions)
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Three
Months Ended March 31,
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||||||||
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2008
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2007
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|||||||
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Revenues
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||||||||
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Passenger
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$ | 4,379 | $ | 4,176 | ||||
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Regional
Affiliates
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581 | 558 | ||||||
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Cargo
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215 | 201 | ||||||
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Other
revenues
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498 | 467 | ||||||
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Total
operating revenues
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5,673 | 5,402 | ||||||
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Expenses
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||||||||
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Aircraft
Fuel
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1,857 | 1,275 | ||||||
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Wages,
salaries and benefits
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1,484 | 1,511 | ||||||
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Regional
payments to AMR Eagle
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586 | 544 | ||||||
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Other
rentals and landing fees
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294 | 301 | ||||||
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Commissions,
booking fees and credit card expense
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257 | 249 | ||||||
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Depreciation
and amortization
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260 | 242 | ||||||
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Maintenance,
materials and repairs
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256 | 195 | ||||||
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Aircraft
rentals
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124 | 148 | ||||||
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Food
service
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125 | 125 | ||||||
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Other
operating expenses
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664 | 629 | ||||||
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Total
operating expenses
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5,907 | 5,219 | ||||||
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Operating
Income (Loss)
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(234 | ) | 183 | |||||
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Other
Income (Expense)
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||||||||
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Interest
income
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52 | 76 | ||||||
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Interest
expense
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(145 | ) | (187 | ) | ||||
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Interest
capitalized
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5 | 9 | ||||||
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Related
party interest - net
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(18 | ) | (20 | ) | ||||
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Miscellaneous
- net
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(4 | ) | (10 | ) | ||||
| (110 | ) | (132 | ) | |||||
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Income
(Loss) Before Income Taxes
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(344 | ) | 51 | |||||
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Income
tax
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- | - | ||||||
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Net
Earnings (Loss)
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$ | (344 | ) | $ | 51 | |||
The
accompanying notes are an integral part of these financial
statements.
AMERICAN
AIRLINES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In
millions)
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March
31,
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December
31,
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|||||||
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2008
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2007
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|||||||
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Assets
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||||||||
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Current
Assets
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||||||||
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Cash
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$ | 199 | $ | 145 | ||||
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Short-term
investments
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4,213 | 4,286 | ||||||
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Restricted
cash and short-term investments
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426 | 428 | ||||||
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Receivables,
net
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1,082 | 1,003 | ||||||
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Inventories,
net
Fuel
derivative contracts
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578
578
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544
416
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||||||
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Other
current assets
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231 | 204 | ||||||
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Total
current assets
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7,307 | 7,026 | ||||||
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Equipment
and Property
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||||||||
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Flight
equipment, net
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11,048 | 11,142 | ||||||
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Other
equipment and property, net
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2,350 | 2,366 | ||||||
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Purchase
deposits for flight equipment
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343 | 239 | ||||||
| 13,741 | 13,747 | |||||||
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Equipment
and Property Under Capital Leases
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Flight
equipment, net
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686 | 686 | ||||||
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Other
equipment and property, net
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72 | 76 | ||||||
| 758 | 762 | |||||||
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Route
acquisition costs and airport operating and gate lease rights,
net
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1,128 | 1,135 | ||||||
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Other
assets
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2,682 | 2,715 | ||||||
| $ | 25,616 | $ | 25,385 | |||||
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Liabilities
and Stockholder’s Equity
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||||||||
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Current
Liabilities
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||||||||
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Accounts
payable
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$ | 1,224 | $ | 1,083 | ||||
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Accrued
liabilities
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2,108 | 2,128 | ||||||
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Air
traffic liability
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4,475 | 3,986 | ||||||
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Payable
to affiliates, net
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1,541 | 1,610 | ||||||
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Current
maturities of long-term debt
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566 | 382 | ||||||
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Current
obligations under capital leases
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146 | 147 | ||||||
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Total
current liabilities
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10,060 | 9,336 | ||||||
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Long-term
debt, less current maturities
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6,350 | 6,600 | ||||||
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Obligations
under capital leases, less current obligations
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629 | 680 | ||||||
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Pension
and postretirement benefits
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3,657 | 3,620 | ||||||
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Other
liabilities, deferred gains and deferred credits
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3,659 | 3,705 | ||||||
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Stockholder’s
Equity
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||||||||
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Common
stock
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- | - | ||||||
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Additional
paid-in capital
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3,868 | 3,862 | ||||||
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Accumulated
other comprehensive loss
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715 | 560 | ||||||
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Accumulated
deficit
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(3,322 | ) | (2,978 | ) | ||||
| 1,261 | 1,444 | |||||||
| $ | 25,616 | $ | 25,385 | |||||
The
accompanying notes are an integral part of these financial
statements.
AMERICAN
AIRLINES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In
millions)
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Three
Months Ended March 31,
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|||
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2008
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2007
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Net
Cash Provided by Operating Activities
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$403
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$814
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Cash
Flow from Investing Activities:
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|||
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Capital
expenditures
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(210)
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(164)
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Net
increase in short-term investments
Net
(increase) decrease in restricted cash and short-term
investments
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73
2
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(638)
(3)
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Proceeds
from sale of equipment and property
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3
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11
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Other
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1
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(1)
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Net
cash used by investing activities
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(131)
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(795)
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Cash
Flow from Financing Activities:
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Payments
on long-term debt and capital lease obligations
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(150)
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(447)
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Reimbursement
from construction reserve account
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1
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42
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Funds
transferred from (to) affiliates, net
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(69)
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408
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Net
cash provided by (used by) financing activities
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(218)
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3
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Net
increase in cash
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54
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22
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Cash
at beginning of period
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145
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120
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Cash
at end of period
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$199
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$142
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The
accompanying notes are an integral part of these financial
statements.
AMERICAN
AIRLINES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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1.
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The
accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with 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, necessary to present fairly the
financial position, results of operations and cash flows for the periods
indicated. Results of operations for the periods presented herein are not
necessarily indicative of results of operations for the entire year.
American Airlines, Inc. (American or the Company) is a wholly owned
subsidiary of AMR Corporation (AMR). The condensed consolidated financial
statements also include the accounts of variable interest entities for
which the Company is the primary beneficiary. For further information,
refer to the consolidated financial statements and footnotes thereto
included in the American Airlines, Inc. Annual Report on Form 10-K for the
year ended December 31, 2007 (2007 Form
10-K).
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2.
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In
the first quarter of 2008, American reclassified revenues associated with
the marketing component of AAdvantage program mileage sales from Passenger
revenue to Other revenue. As a result of this change,
approximately $150 million of revenue was reclassified from Passenger
revenue to Other revenue in the quarter ended March 31, 2007 to conform to
the current presentation.
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3.
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As
of March 31, 2008, the Company had commitments to acquire 25 Boeing
737-800s in 2009, three Boeing 737-800s in 2010 and an aggregate of 26
Boeing 737 aircraft and seven Boeing 777 aircraft in 2013 through
2016. Payments will approximate $239 million in the remainder
of 2008, $498 million in 2009, $50 million in 2010, $106 million in 2011,
$336 million in 2012, and $1.5 billion for 2013 and beyond. These amounts
are net of purchase deposits currently held by the
manufacturer. However, if as anticipated, the Company commits
to accelerating the delivery dates of a significant number of aircraft in
the future, a significant portion of the $1.9 billion commitment from 2011
and beyond will be accelerated into 2008, 2009 and 2010. In
addition, any incremental aircraft orders will increase the Company’s
commitments.
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On
December 18, 2007, the European Commission issued a Statement of Objection
(“SO”) against 26 airlines, including the Company. The SO alleges
that these carriers participated in a conspiracy to set surcharges on cargo
shipments in violation of EU law. The SO states that, in the event
that the allegations in the SO are affirmed, the Commission will impose fines
against the Company. The Company intends to vigorously contest the
allegations and findings in the SO under EU laws, and it intends to cooperate
fully with all other pending investigations. In the event that the SO
is affirmed or other investigations uncover violations of the U.S. antitrust
laws or the competition laws of some other jurisdiction, or if the Company were
named and found liable in any litigation based on these allegations, such
findings and related legal proceedings could have a material adverse impact on
the Company. The evaluation of this allegation is still in the early
stages, but based on the information to date, the Company has not recorded any
reserve for this exposure for the quarter ended March 31, 2008.
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4.
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Accumulated
depreciation of owned equipment and property at March 31, 2008 and
December 31, 2007 was $10.7 billion and $10.5 billion,
respectively. Accumulated amortization of equipment and
property under capital leases at March 31, 2008 and December 31, 2007 was
$1.1 billion and $1.2 billion,
respectively.
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5.
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As
discussed in Note 8 to the consolidated financial statements in the 2007
Form 10-K, the Company has a valuation allowance against the full amount
of it net deferred tax asset. The Company currently provides a valuation
allowance against deferred tax assets when it is more likely than not that
some portion, or all of its deferred tax assets, will not be realized. The
Company’s deferred tax asset valuation allowance increased approximately
$56 million during the three months ended March 31, 2008 to $1.2 billion
as of March 31, 2008, including the impact of comprehensive income for the
three months ended March 31, 2008 and changes from other
adjustments.
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AMERICAN
AIRLINES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
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6.
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As
of March 31, 2008, American had issued guarantees covering approximately
$1.1 billion of AMR’s unsecured debt. In addition, as of March
31, 2008, AMR and American had issued guarantees covering approximately
$327 million of AMR Eagle’s secured
debt.
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7.
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In
September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 157 “Fair Value
Measurements” (SFAS 157). SFAS 157 introduces a framework for
measuring fair value and expands required disclosure about fair value
measurements of assets and liabilities. SFAS 157 for financial
assets and liabilities is effective for fiscal years beginning after
November 15, 2007, and the Company has adopted the standard for those
assets and liabilities as of January 1, 2008 and the impact of adoption
was not significant.
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SFAS 157
defines fair value as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. SFAS 157 also establishes a fair
value hierarchy which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value.
The standard describes three levels of inputs that may be used to measure fair
value:
Level 1 - Quoted prices in
active markets for identical assets or liabilities.
Level 2 - Observable inputs
other than Level 1 prices such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities. The
Company’s short-term investments primarily utilize broker quotes in a non-active
market for valuation of these securities. The Company’s fuel
derivative contracts, which primarily consist of commodity options and collars,
are valued using energy and commodity market data which is derived by combining
raw inputs with quantitative models and processes to generate forward curves and
volatilities.
Level 3 - Unobservable inputs
that are supported by little or no market activity and that are significant to
the fair value of the assets or liabilities.
The
Company utilizes the market approach to measure fair value for its financial
assets and liabilities. The market approach uses prices and other
relevant information generated by market transactions involving identical or
comparable assets or liabilities.
Assets
and liabilities measured at fair value on a recurring basis are summarized
below:
|
(in
millions)
|
Fair Value Measurements as of
March 31, 2008
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|||||||||||||||
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Description
|
Total
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Level
1
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Level
2
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Level
3
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||||||||||||
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Short
term investments 1
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$ | 4,213 | $ | 712 | $ | 3,501 | $ | - | ||||||||
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Restricted
cash and short-term investments 1
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426 | 426 | - | - | ||||||||||||
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Fuel
derivative contracts 1
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578 | - | 578 | - | ||||||||||||
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Total
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$ | 5,217 | $ | 1,138 | $ | 4,079 | $ | - | ||||||||
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1
Unrealized gains or losses on short term investments, restricted
cash and short-term investments and derivatives are
recorded
in Accumulated other comprehensive
income (loss) at each measurement
date.
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AMERICAN
AIRLINES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
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8.
|
The
following table provides the components of net periodic benefit cost for
the three months ended March 31, 2008 and 2007 (in
millions):
|
|
Pension
Benefits
|
Retiree
Medical and Other Benefits
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
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Components of net periodic benefit
cost
|
||||||||||||||||
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Service
cost
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$ | 81 | $ | 92 | $ | 13 | $ | 17 | ||||||||
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Interest
cost
|
171 | 168 | 43 | 47 | ||||||||||||
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Expected
return on assets
|
(198 | ) | (187 | ) | (5 | ) | (4 | ) | ||||||||
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Amortization
of:
|
||||||||||||||||
|
Prior
service cost
|
4 | 4 | (4 | ) | (4 | ) | ||||||||||
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Unrecognized
net (gain) loss
|
- | 7 | (6 | ) | (2 | ) | ||||||||||
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Net
periodic benefit cost
|
$ | 58 | $ | 84 | $ | 41 | $ | 54 | ||||||||
The
Company contributed $25 million to its defined benefit pension plans during the
three months ended March 31, 2008 and contributed $50 million on April 15,
2008.
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9.
|
As a result
of the revenue environment, high fuel prices and the Company’s
restructuring activities, the Company has recorded a number of charges
during the last few years. The following table summarizes the components
of these charges and the remaining accruals for these charges (in
millions):
|
|
Aircraft
Charges
|
Facility
Exit Costs
|
Total
|
||||||||||
|
Remaining
accrual at December 31, 2007
|
$ | 124 | $ | 18 | $ | 142 | ||||||
|
Adjustments
|
- | (5 | ) | (5 | ) | |||||||
|
Payments
|
(18 | ) | - | (18 | ) | |||||||
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Remaining
accrual at March 31, 2008
|
$ | 106 | $ | 13 | $ | 119 | ||||||
Cash
outlays related to the accruals for aircraft charges and facility exit costs
will occur through 2017 and 2018, respectively.
|
10.
|
The
Company includes changes in the fair value of certain derivative financial
instruments that qualify for hedge accounting and unrealized gains and
losses on available-for-sale securities in comprehensive income. For the
three months ended March 31, 2008 comprehensive loss was $(189) million,
as opposed to comprehensive income of $123 million for the three months
ended March 31, 2007. The difference between net income (loss) and
comprehensive income (loss) for both of the three month periods ended
March 31, 2008 and 2007 is due primarily to the accounting for the
Company’s derivative financial instruments. Due to the current
value of the Company’s derivative contracts, some agreements with
counterparties require collateral to be deposited with the
Company. As of March 31, 2008 the collateral held in Short-term
investments by AMR from such counterparties was $274 million, an increase
of $110 million from December 31,
2007.
|
AMERICAN
AIRLINES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
60;
Ineffectiveness
is inherent in hedging jet fuel with derivative positions based in crude oil or
other crude oil related commodities. As required by Statement of
Financial Accounting Standard No. 133, “Accounting for Derivative Instruments
and Hedging Activities”, the Company assesses, both at the inception of each
hedge and on an on-going basis, whether the derivatives that are used in its
hedging transactions are highly effective in offsetting changes in cash flows of
the hedged items. In doing so, the Company uses a regression model to
determine the correlation of the change in prices of the commodities used to
hedge jet fuel (NYMEX Heating oil) to the change in the price of jet
fuel. The Company also monitors the actual dollar offset of the
hedges’ market values as compared to hypothetical jet fuel
hedges. The fuel hedge contracts are generally deemed to be “highly
effective” if the R-squared is greater than 80 percent and the dollar offset
correlation is within 80 percent to 125 percent. The Company
discontinues hedge accounting prospectively if it determines that a derivative
is no longer expected to be highly effective as a hedge or if it decides to
discontinue the hedging relationship.
In March
of 2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosures about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133” (SFAS 161). SFAS 161 requires entities to
provide greater transparency about how and why the entity uses derivative
instruments, how the instruments and related hedged items are accounted for
under SFAS 133, and how the instruments and related hedged items affect the
financial position, results of operations, and cash flows of the
entity. SFAS 161 is effective for fiscal years beginning after
November 15, 2008. The principal impact to the Company will be to
require the Company to expand its disclosure regarding its derivative
instruments.
Item
2. Management's Discussion and
Analysis of Financial Condition and Results of Operations
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," “indicates,” “believes,” “forecast,” “guidance,”
“outlook,” “may,” “will,” “should,” “seeks”, “targets” and similar
expressions are intended to identify forward-looking statements. Similarly,
statements that describe our objectives, plans or goals are forward-looking
statements. Forward-looking statements include, without limitation,
the Company’s expectations concerning operations and financial conditions,
including changes in capacity, revenues, and costs, future financing plans and
needs, fleet plans, overall economic conditions, plans and objectives for future
operations, and the impact on the Company of its results of operations in recent
years and the sufficiency of its financial resources to absorb that impact.
Other forward-looking statements include statements which do not relate solely
to historical facts, such as, without limitation, statements which discuss the
possible future effects of current known trends or uncertainties, or which
indicate that the future effects of known trends or uncertainties cannot be
predicted, guaranteed or assured. All forward-looking statements in
this 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 the Company’s
actual results to differ materially from the Company’s
expectations. The following factors, in addition to other possible
factors not listed, could cause the Company’s actual results to differ
materially from those expressed in forward-looking statements: the
materially weakened financial condition of the Company, resulting from its
significant losses in recent years; the ability of the Company to generate
additional revenues and reduce its costs; changes in economic and other
conditions beyond the Company’s control, and the volatile results of the
Company’s operations; the Company’s substantial indebtedness and other
obligations; the ability of the Company to satisfy existing financial or other
covenants in certain of its credit agreements; continued high and volatile fuel
prices and further increases in the price of fuel, and the availability of fuel;
the fiercely and increasingly competitive business environment faced by the
Company; industry consolidation, competition with reorganized carriers; low fare
levels by historical standards and the Company’s reduced pricing power; the
Company’s need to raise additional funds and its ability to do so on acceptable
terms; changes in the Company’s corporate or business strategy; government
regulation of the Company’s business; conflicts overseas or terrorist attacks;
uncertainties with respect to the Company’s international operations; outbreaks
of a disease (such as SARS or avian flu) that affects travel behavior; labor
costs that are higher than those of the Company’s competitors; uncertainties
with respect to the Company’s relationships with unionized and other employee
work groups; increased insurance costs and potential reductions of available
insurance coverage; the Company’s ability to retain key management personnel;
potential failures or disruptions of the Company’s computer, communications or
other technology systems; changes in the price of the Company’s common stock;
and the ability of the Company to reach acceptable agreements with third
parties. Additional information concerning these and other factors is
contained in the Company’s Securities and Exchange Commission filings, including
but not limited to the Company’s 2007 Form 10-K (see in particular Item 1A “Risk
Factors” in the 2007 Form 10-K).
Overview
The
Company recorded a net loss of $344 million in the first quarter of 2008
compared to net earnings of $51 million in the same period last
year. The Company’s loss reflects a dramatic year-over-year increase
in fuel prices from an average of $1.84 per gallon in the first quarter 2007 to
an average of $2.73 per gallon in the first three months of
2008. Fuel expense is the Company’s largest single expense category
and the price increase resulted in $605 million in incremental year-over-year
fuel expense in the first quarter 2008 (based on the year-over-year increase in
the average price per gallon multiplied by gallons consumed).
The
significant rise in fuel price was partially offset by higher unit revenues
(passenger revenue per available seat mile). Passenger unit revenues
increased 6.5 percent for the first quarter due to a one point load factor
increase and a 5.1 percent increase in passenger yield (passenger revenue per
passenger mile) compared to the same period in 2007. Although load
factor performance and passenger yield showed year-over-year improvement,
passenger yield remains low by historical standards and below the Company’s peak
yield set in the year 2000. The Company believes this is the result
of a fragmented industry with numerous competitors and excess capacity,
increased competition from low cost carriers and from carriers that have
recently reorganized under the protection of Chapter 11, pricing transparency
resulting from the use of the Internet, and other factors. We believe
that our reduced pricing power could persist indefinitely.
As of
March 31, 2008, the Company had commitments to acquire 25 Boeing 737-800s in
2009, three Boeing 737-800s in 2010 and an aggregate of 26 Boeing 737 aircraft
and seven Boeing 777 aircraft in 2013 through 2016 as a part of its fleet
replacement strategy. On April 1, 2008, AMR committed to acquire two
incremental Boeing 737-800s to be delivered in 2009. See subsection
entitled “Significant Indebtedness and Future Financing” under Item 2.
Management’s Discussion and Analysis and Note 3 to the condensed consolidated
financial statements for more information.
The
Company’s ability to become consistently profitable and its ability to continue
to fund its obligations on an ongoing basis will depend on a number of factors,
many of which are largely beyond the Company’s control. Certain risk
factors that affect the Company’s business and financial results are referred to
under “Forward-Looking Information” above and are discussed in the Risk Factors
listed in Item 1A (on pages 11-17) in the 2007 Form 10-K. In addition, four of
the Company’s largest domestic competitors and several smaller carriers have
filed for bankruptcy in the last several years and have used this process to
significantly reduce contractual labor and other costs. In order to
remain competitive and to improve its financial condition, the Company must
continue to take steps to generate additional revenues and to reduce its costs.
Although the Company has a number of initiatives underway to address its cost
and revenue challenges, the ultimate success of these initiatives is not known
at this time and cannot be assured.
LIQUIDITY
AND CAPITAL RESOURCES
Significant Indebtedness and
Future Financing
The
Company remains heavily indebted and has significant obligations (including
substantial pension funding obligations), as described more fully under Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in the 2007 Form 10-K. As of the date of this Form 10-Q,
the Company believes it should have sufficient liquidity to fund its operations
for the foreseeable future, including repayment of debt and capital leases,
capital expenditures and other contractual obligations. However, to maintain
sufficient liquidity as the Company continues to implement its restructuring and
cost reduction initiatives, and because the Company has significant debt, lease
and other obligations in the next several years, including commitments to
purchase aircraft, as well as substantial pension funding obligations, the
Company will need access to additional funding.
The
Company’s possible financing sources primarily include: (i) a limited amount of
additional secured aircraft debt (a very large majority of the Company’s owned
aircraft, including most of the Company’s Section 1110-eligible aircraft, are
encumbered) or sale-leaseback transactions involving owned aircraft; (ii) debt
secured by new aircraft deliveries; (iii) debt secured by other assets; (iv)
securitization of future operating receipts; (v) the sale or monetization of
certain assets; (vi) unsecured debt; and (vii) issuance of equity and/or
equity-like securities. However, the availability and level of these financing
sources cannot be assured, particularly in light of the Company’s and American’s
recent financial results, substantial indebtedness, reduced credit ratings, high
fuel prices, revenues that are weak by historical standards and the financial
difficulties being experienced in the airline industry. The inability of the
Company to obtain necessary funding on acceptable terms would have a material
adverse impact on the Company.
The
Company’s substantial indebtedness and other obligations could have important
consequences. For example, they could: (i) limit the Company’s
ability to obtain additional financing for working capital, capital
expenditures, acquisitions and general corporate purposes, or adversely affect
the terms on which such financing could be obtained; (ii) require the Company to
dedicate a substantial portion of its cash flow from operations to payments on
its indebtedness and other obligations, thereby reducing the funds available for
other purposes; (iii) make the Company more vulnerable to economic downturns;
(iv) limit the Company’s ability to withstand competitive pressures and reduce
its flexibility in responding to changing business and economic conditions; and
(v) limit the Company’s flexibility in planning for, or reacting to, changes in
its business and the industry in which it operates.
Future
payments for all aircraft that the Company was committed to acquire as of March
31, 2008, including the estimated amounts for price escalation, are currently
estimated to be approximately $2.7 billion, with the majority currently
scheduled to be made in 2011 through 2016. Payments are currently
scheduled to be approximately $239 million in the remainder of 2008, $498
million in 2009, $50 million in 2010, $106 million in 2011, $336 million in
2012, and $1.5 billion for 2013 and beyond. These amounts are net of purchase
deposits currently held by the manufacturer. However, the Company
intends to accelerate the delivery of certain aircraft that it is committed to
purchase and order additional aircraft, as described below.
As a part
of the Company’s efforts to improve the cost and fuel efficiency of its fleet,
as well as lessen the Company’s impact on the environment, AMR announced on
April 16, 2008 its intention to further accelerate the replacement of its MD-80
aircraft fleet with Boeing 737-800 aircraft. The Company now intends to take
delivery of a total of 34 Boeing 737-800 aircraft in 2009 and expects to take
delivery of 36 Boeing 737-800s in 2010. These expected deliveries
would be pursuant to both accelerated orders and incremental
orders. If, as anticipated, the Company commits to accelerating the
delivery dates of additional aircraft, the related capital expenditure
commitments will be accelerated, and any incremental aircraft orders will
increase the Company’s obligation. This proposed fleet replacement
plan would increase the Company’s 2008-2010 commitments described above by an
estimated $1.3 billion. The Company’s continued replacement strategy,
and its execution of that strategy, will depend on such factors as future
economic and industry conditions and the financial condition of the
Company. The Company also continues to evaluate the economic benefits
and other aspects of replacing some of the other aircraft in its fleet with new
aircraft.
The
Company currently has no committed financing for any aircraft that it is
committed to purchase or that it may order. The Company will need
additional financing to continue to execute its fleet replacement
plan.
Credit Facility
Covenants
American
has a secured bank credit facility which consists of a $255 million revolving
credit facility, with a final maturity on June 17, 2009, and a fully drawn $439
million term loan facility, with a final maturity on December 17, 2010 (the
Revolving Facility and the Term Loan Facility, respectively, and collectively,
the Credit Facility). In 2007, American paid in full the $255 million
principal balance of the Revolving Facility and as of March 31, 2008, it
remained undrawn. American’s obligations under the Credit Facility
are guaranteed by AMR.
The
Credit Facility contains a covenant (the Liquidity Covenant) requiring American
to maintain, as defined, unrestricted cash, unencumbered short term investments
and amounts available for drawing under committed revolving credit facilities of
not less than $1.25 billion for each quarterly period through the life of the
Credit Facility. AMR and American were in compliance with the Liquidity Covenant
as of March 31, 2008 and expect to be able to continue to comply with this
covenant. In addition, the Credit Facility contains a covenant (the
EBITDAR Covenant) requiring AMR to maintain a ratio of cash flow (defined as
consolidated net income, before interest expense (less capitalized interest),
income taxes, depreciation and amortization and rentals, adjusted for certain
gains or losses and non-cash items) to fixed charges (comprising interest
expense (less capitalized interest) and rentals). The required ratio
was 1.40 to 1.00 for the four quarter period ending March 31, 2008, and will
increase to 1.50 to 1.00 for the four quarter period ending June 30, 2009. AMR
and American were in compliance with the EBITDAR covenant for the period ending
March 31, 2008; however, given fuel prices that are high by historical standards
and the volatility of fuel prices and revenues, it is difficult to assess
whether AMR and American will be able to continue to comply with this covenant
for subsequent periods, and there are no assurances that AMR and American will
be able to do so. Failure to comply with these covenants would result
in a default under the Credit Facility which - - if the Company did not take
steps to obtain a waiver of, or otherwise mitigate, the default - - could result
in a default under a significant amount of the Company’s other debt and lease
obligations and otherwise have a material adverse impact on the
Company.
Credit Card Processing
Agreement
Under
American’s credit card processing agreement, the card processor may require
American to maintain with the processor a reserve from American’s credit card
receivables under certain circumstances. The amount of any such
reserve would be based on, among other things, the amount of unrestricted cash
held by American and American’s debt service coverage ratio, as defined in the
agreement. American is not currently required to maintain any reserve
under the agreement. Given fuel prices that are high by historical standards and
the volatility of fuel prices and revenues, it is difficult to assess whether
American could be required to maintain such a reserve in the future and, if so,
the amount of the reserve.
Pension Funding
Obligation
The
Company has contributed $25 million to its defined benefit pension plans during
the three months ended March 31, 2008 and contributed $50 million on April 15,
2008.
Cash Flow
Activity
At March 31, 2008, the
Company had $4.4 billion in unrestricted cash and short-term investments,
comparable with the balance as of December 31, 2007, and $255 million available
under the Revolving Facility. Net cash provided by operating
activities in the three-month period ended March 31, 2008 was $403 million, a
decrease of $411 million over the same period in 2007 primarily due to a
dramatic year-over-year increase in average fuel prices from $1.84 per gallon in
the first quarter 2007 to $2.73 per gallon in the first three months of
2008. The fuel price increase resulted in $605 million in incremental
year-over-year expense in the first quarter 2008 (based on the year-over-year
increase in the average price per gallon multiplied by gallons
consumed). The Company contributed $25 million to its defined benefit
pension plans in the first quarter of 2008 compared to $62 million during the
first quarter of 2007.
Capital
expenditures for the first three months of 2008 were $210 million and primarily
included aircraft purchase deposits and aircraft modifications.
In the
past, the Company has from time to time refinanced, redeemed or repurchased its
debt and taken other steps to reduce its debt or lease obligations or otherwise
improve its balance sheet. Going forward, depending on market
conditions, its cash positions and other considerations, the Company may
continue to take such actions.
RESULTS
OF OPERATIONS
For the Three Months Ended
March 31, 2008 and 2007
Revenues
The
Company’s revenues increased approximately $271 million, or 5.0 percent, to $5.7
billion in the first quarter of 2008 from the same period last
year. American’s passenger revenues increased by 4.9 percent, or $203
million, on a 1.5 percent decrease in capacity (available seat mile)
(ASM). American’s passenger load factor increased 1.0 point to 79.1
percent while passenger yield increased by 5.1 percent to 13.48
cents. This resulted in an increase in passenger revenue per
available seat mile (RASM) of 6.5 percent to 10.67 cents. Following is
additional information regarding American’s domestic and international RASM and
capacity:
|
Three
Months Ended March 31, 2008
|
||||||||||||||||
|
RASM
(cents)
|
Y-O-Y
Change
|
ASMs
(billions)
|
Y-O-Y
Change
|
|||||||||||||
|
DOT
Domestic
|
10.5 | 6.9 | % | 25.8 | (3.6 | )% | ||||||||||
|
International
|
10.9 | 5.6 | 15.2 | 2.2 | ||||||||||||
|
DOT
Latin America
|
12.1 | 8.0 | 8.1 | 3.5 | ||||||||||||
|
DOT
Atlantic
|
9.4 | (0.5 | ) | 5.5 | 1.6 | |||||||||||
|
DOT
Pacific
|
9.8 | 10.7 | 1.6 | (2.5 | ) | |||||||||||
Regional
Affiliates include two wholly owned subsidiaries, American Eagle Airlines, Inc.
and Executive Airlines, Inc. (collectively, AMR Eagle), and two independent
carriers with which American has capacity purchase agreements, Trans States
Airlines, Inc. (Trans States) and Chautauqua Airlines, Inc.
(Chautauqua).
Regional
Affiliates’ passenger revenues, which are based on industry standard proration
agreements for flights connecting to American flights, increased $23 million, or
4.1 percent, to $581 million as a result of increased passenger
yield. Regional Affiliates’ traffic decreased 5.3 percent to 2.1
billion revenue passenger miles (RPMs), while capacity decreased 5.1 percent to
3.1 billion ASMs, resulting in a 0.1 point decrease in the passenger load factor
to 69.0 percent.
In the
first quarter of 2008, the Company began classifying certain mileage sales
revenue to Other revenue, which was previously recognized as a component of
Passenger revenue. See Note 2 to the condensed consolidated financial
statements for additional information.
Operating
Expenses
The
Company’s total operating expenses increased 13.2 percent, or $688 million, to
$5.9 billion in the first quarter of 2008 compared to the first quarter of
2007. The Company’s operating expenses per ASM in the first quarter
of 2008 increased 15.8 percent to 12.63 cents compared to the first quarter of
2007. These increases are due primarily to a dramatic year-over-year increase in
fuel prices from $1.84 per gallon in the first quarter 2007 to $2.73 per gallon
in the first three months of 2008. Fuel expense is the Company’s
largest single expense category and the price increase resulted in $605 million
in incremental year-over-year fuel expense in the first quarter 2008 (based on
the year-over-year increase in the average price per gallon multiplied by
gallons consumed). Continuing high fuel prices, additional increases in the
price of fuel and/or disruptions in the supply of fuel would further adversely
affect the Company’s financial condition and results of operations.
In
addition, the Company’s operating and financial results were significantly
affected by a significant number of weather related cancellations that resulted
in an approximately three percent decrease in the Company’s scheduled mainline
departures during the first quarter of 2008.
|
(in
millions)
Operating
Expenses
|
Three
Months Ended
March
31, 2008
|
Change
from 2007
|
Percentage
Change
|
||||||||||
|
Aircraft
Fuel
|
$ | 1,857 | $ | 582 | 45.6 | % |
(a)
|
||||||
|
Wages,
salaries and benefits
|
1,484 | (27 | ) | (1.8 | ) | ||||||||
|
Regional
payments to AMR Eagle
|
586 | 42 | 7.7 | ||||||||||
|
Other
rentals and landing fees
|
294 | (7 | ) | (2.3 | ) | ||||||||
|
Depreciation
and amortization
|
260 | 18 | 7.4 | ||||||||||
|
Commissions,
booking fees and credit card expense
|
257 | 8 | 3.2 | ||||||||||
|
Maintenance,
materials and repairs
|
256 | 61 | 31.3 |
(b)
|
|||||||||
|
Aircraft
rentals
|
124 | (24 | ) | (16.2 | ) | ||||||||
|
Food
service
|
125 | - | - | ||||||||||
|
Other
operating expenses
|
664 | 35 | 5.6 | ||||||||||
|
Total
operating expenses
|
$ | 5,907 | $ | 688 | 13.2 | % | |||||||
|
(a)
|
Aircraft
fuel expense increased primarily due to a 48.3 percent increase in the
Company’s price per gallon of fuel (net of the impact of fuel hedging)
offset by a 1.8 percent decrease in the Company’s fuel
consumption.
|
|
(b)
|
Maintenance,
materials and repairs expense increased due to a heavier workscope of
scheduled airframe maintenance overhauls, repair costs and volume, and
contractual engine repair rates, which are driven by aircraft
age.
|
Other
Income (Expense)
Interest
income decreased $24 million due to both a decrease in short-term investment
balances and a decrease in interest rates. Interest expense decreased
$42 million as a result of a decrease in the Company’s long-term debt
balance.
Income
Tax
The
Company did not record a net tax provision (benefit) associated with its first
quarter 2008 loss and first quarter 2007 earnings due to the Company providing a
valuation allowance, as discussed in Note 5 to the condensed consolidated
financial statements.
Regional
Affiliates
The
following table summarizes the combined capacity purchase activity for the
American Connection carriers and AMR Eagle for the three months ended March 31,
2008 and 2007 (in millions):
|
Three
Months Ended March 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Revenues:
|
||||||||
|
Regional
Affiliates
|
$ | 581 | $ | 558 | ||||
|
Other
|
26 | 23 | ||||||
| $ | 607 | $ | 581 | |||||
|
Expenses:
|
||||||||
|
Regional
payments
|
$ | 643 | $ | 591 | ||||
|
Other
incurred expenses
|
78 | 77 | ||||||
| $ | 721 | $ | 668 | |||||
In
addition, passengers connecting to American’s flights from American Connection
and AMR Eagle flights generated passenger revenues for American flights of $399
million and $413 million in the first quarter of 2008 and 2007, respectively,
which are included in Revenues – Passenger in the consolidated statements of
operations.
Outlook
The
Company currently expects second quarter 2008 mainline unit costs to increase
approximately 17.7 percent year over year and full year 2008 mainline unit cost
to increase approximately 14.4 percent year over year primarily due to the
increase in the price of fuel. The Company’s results are
significantly affected by the price of jet fuel, which is in turn affected by a
number of factors beyond our control. Fuel prices are volatile and
the Company expects full year fuel expense to increase significantly in 2008
versus 2007.
As a
result of increased fuel prices and growing concerns about the economy, the
Company is reducing full year capacity from the previous guidance given in its
Annual Report on Form 10-K for the year ended December 31,
2007. Capacity for American’s mainline jet operations is expected to
decline 1.4 percent in the second quarter compared to the second quarter of 2007
and is expected to decline approximately 1.4 percent for the full year 2008
compared to 2007.
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 Company’s 2007 Form
10-K. The change in market risk for aircraft fuel is discussed below for
informational purposes.
The risk
inherent in the Company’s fuel related market risk sensitive instruments and
positions is the potential loss arising from adverse changes in the price of
fuel. The sensitivity analyses presented do not consider the effects
that such adverse changes may have on overall economic activity, nor do they
consider additional actions management may take to mitigate the Company’s
exposure to such changes. Therefore, actual results may
differ. The Company does not hold or issue derivative financial
instruments for trading purposes.
Aircraft
Fuel The Company’s earnings are affected by changes in
the price and availability of aircraft fuel. In order to provide a
measure of control over price and supply, the Company trades and ships fuel and
maintains fuel storage facilities to support its flight
operations. The Company also manages the price risk of fuel costs
primarily by using jet fuel, and heating oil hedging
contracts. Market risk is estimated as a hypothetical 10 percent
increase in the March 31, 2008 cost per gallon of fuel. Based on
projected 2008 and 2009 fuel usage through March 31, 2009, such an increase
would result in an increase to aircraft fuel expense of approximately $714
million in the twelve months ended March 31, 2008, inclusive of the impact of
effective fuel hedge instruments outstanding at March 31, 2009, and assumes the
Company’s fuel hedging program remains effective under Financial Accounting
Standard No. 133, “Accounting for Derivative Instruments and Hedging
Activities”. Comparatively, based on projected 2008 fuel usage, such
an increase would have resulted in an increase to aircraft fuel expense of
approximately $586 million in the twelve months ended December 31, 2008,
inclusive of the impact of fuel hedge instruments outstanding at December 31,
2007. The change in market risk is primarily due to the increase in
fuel prices.
Ineffectiveness
is inherent in hedging jet fuel with derivative positions based in crude oil or
other crude oil related commodities. As required by Statement of
Financial Accounting Standard No. 133, “Accounting for Derivative Instruments
and Hedging Activities”, the Company assesses, both at the inception of each
hedge and on an on-going basis, whether the derivatives that are used in its
hedging transactions are highly effective in offsetting changes in cash flows of
the hedged items. In doing so, the Company uses a regression model to
determine the correlation of the change in prices of the commodities used to
hedge jet fuel (e.g. NYMEX Heating oil) to the change in the price of jet
fuel. The Company also monitors the actual dollar offset of the
hedges’ market values as compared to hypothetical jet fuel
hedges. The fuel hedge contracts are generally deemed to be “highly
effective” if the R-squared is greater than 80 percent and the dollar offset
correlation is within 80 percent to 125 percent. The Company
discontinues hedge accounting prospectively if it determines that a derivative
is no longer expected to be highly effective as a hedge or if it decides to
discontinue the hedging relationship.
As of
March 31, 2008, the Company had effective hedges, including option contracts and
collars, covering approximately 27 percent of its estimated remaining 2008 fuel
requirements. The consumption hedged for the remainder of 2008 is
capped at an average price of approximately $2.48 per gallon of jet fuel
excluding taxes and transportation costs. A deterioration of the
Company’s financial position could negatively affect the Company’s ability to
hedge fuel in the future.
Item
4. Controls and
Procedures
The term
“disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934, or the Exchange Act. This term refers to
the controls and procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified by the Securities and Exchange Commission. An
evaluation was performed under the supervision and with the participation of the
Company’s management, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), of the effectiveness of the Company’s disclosure
controls and procedures as of March 31, 2008. Based on that
evaluation, the Company’s management, including the CEO and CFO, concluded that
the Company’s disclosure controls and procedures were effective as of March 31,
2008. During the quarter ending on March 31, 2008, there was no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
PART
II: OTHER INFORMATION
Item
1. Legal
Proceedings
Between
April 3, 2003 and June 5, 2003, three lawsuits were filed by travel agents, some
of whom opted out of a prior class action (now dismissed) to pursue their claims
individually against American, other airline defendants, and in one case against
certain airline defendants and Orbitz LLC. The cases, Tam Travel et. al., v. Delta
Air Lines et. al., in the United States District Court for the Northern
District of California, San Francisco (51 individual agencies), Paula Fausky d/b/a Timeless
Travel v. American Airlines, et. al, in the United States District Court
for the Northern District of Ohio, Eastern Division (29 agencies) and Swope Travel et al. v.
Orbitz et. al. in the United States District Court for the Eastern
District of Texas, Beaumont Division (71 agencies) were consolidated for
pre-trial purposes in the United States District Court for the Northern District
of Ohio, Eastern Division. Collectively, these lawsuits seek damages and
injunctive relief alleging that the certain airline defendants and Orbitz LLC:
(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; (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; and that (iii) between 1995 and the present, the airline
defendants conspired to reduce commissions paid to U.S.-based travel agents in
violation of Section 1 of the Sherman Act. On September 23, 2005, the
Fausky
plaintiffs dismissed their claims with prejudice. On September 14, 2006,
the court dismissed with prejudice 28 of the Swope plaintiffs On October
29, 2007, the court dismissed all of the Swope plaintiffs’
claims. The Swope plaintiffs have
appealed the court’s decision. American continues to vigorously defend
these lawsuits. A final adverse court decision awarding substantial money
damages or placing material restrictions on the Company’s distribution practices
would have a material adverse impact on the Company.
On July
12, 2004, a consolidated class action complaint, that was subsequently amended
on November 30, 2004, was filed against American and the Association of
Professional Flight Attendants (APFA), the union which represents American’s
flight attendants (Ann
M. Marcoux, et al., v. American Airlines Inc., et al. in the United
States District Court for the Eastern District of New York). While a class has
not yet been certified, the lawsuit seeks on behalf of all of American’s flight
attendants or various subclasses to set aside, and to obtain damages allegedly
resulting from, the April 2003 Collective Bargaining Agreement referred to as
the Restructuring Participation Agreement (RPA). The RPA was one of three labor
agreements American successfully reached with its unions in order to avoid
filing for bankruptcy in 2003. In a related case (Sherry Cooper, et al. v.
TWA Airlines, LLC, et al., also in the United States District Court for
the Eastern District of New York), the court denied a preliminary injunction
against implementation of the RPA on June 30, 2003. The Marcoux suit alleges
various claims against the APFA and American relating to the RPA and the
ratification vote on the RPA by individual APFA members, including: violation of
the Labor Management Reporting and Disclosure Act (LMRDA) and the APFA’s
Constitution and By-laws, violation by the APFA of its duty of fair
representation to its members, violation by American of provisions of the
Railway Labor Act (RLA) through improper coercion of flight attendants into
voting or changing their vote for ratification, and violations of the Racketeer
Influenced and Corrupt Organizations Act of 1970 (RICO). On March 28, 2006, the
district court dismissed all of various state law claims against American, all
but one of the LMRDA claims against the APFA, and the claimed violations of
RICO. This leaves the claimed violations of the RLA and the duty of
fair representation against American and the APFA (as well as one LMRDA claim
and one claim against the APFA of a breach of its
constitution). Although the Company believes the case against it is
without merit and both American and the APFA are vigorously defending the
lawsuit, a final adverse court decision invalidating the RPA and awarding
substantial money damages would have a material adverse impact on the
Company.
On
February 14, 2006, the Antitrust Division of the United States Department of
Justice (the “DOJ”) served the Company with a grand jury subpoena as part of an
ongoing investigation into possible criminal violations of the antitrust laws by
certain domestic and foreign air cargo carriers. At this time, the Company does
not believe it is a target of the DOJ investigation. The New Zealand
Commerce Commission notified the Company on February 17, 2006 that it is also
investigating whether the Company and certain other cargo carriers entered into
agreements relating to fuel surcharges, security surcharges, war risk
surcharges, and customs clearance surcharges. On February 22, 2006, the
Company received a letter from the Swiss Competition Commission informing the
Company that it too is investigating whether the Company and certain other cargo
carriers entered into agreements relating to fuel surcharges, security
surcharges, war risk surcharges, and customs clearance surcharges. On March 11,
2008, the Company received from the Swiss Competition Commission a request for
information concerning, among other things, the scope and organization of the
Company’s activities in Switzerland. On December 19, 2006 and June
12, 2007, the Company received requests for information from the European
Commission, seeking information regarding the Company's corporate structure,
revenue and pricing announcements for air cargo shipments to and from the
European Union. On January 23, 2007, the Brazilian competition authorities, as
part of an ongoing investigation, conducted an unannounced search of the
Company’s cargo facilities in Sao Paulo, Brazil. The authorities are
investigating whether the Company and certain other foreign and domestic air
carriers violated Brazilian competition laws by illegally conspiring to set fuel
surcharges on cargo shipments. On June 27, 2007 and October 31, 2007, the
Company received requests for information from the Australian Competition and
Consumer Commission seeking information regarding fuel surcharges imposed by the
Company on cargo shipments to and from Australia and regarding the structure of
the Company's cargo operations. On December 18, 2007, the European Commission
issued a Statement of Objection (“SO”) against 26 airlines, including the
Company. The SO alleges that these carriers participated in a
conspiracy to set surcharges on cargo shipments in violation of EU
law. The SO states that, in the event that the allegations in the SO
are affirmed, the Commission will impose fines against the
Company. The Company intends to vigorously contest the allegations
and findings in the SO under EU laws, and it intends to cooperate fully with all
other pending investigations. In the event that the SO is affirmed or other
investigations uncover violations of the U.S. antitrust laws or the competition
laws of some other jurisdiction, or if the Company were named and found liable
in any litigation based on these allegations, such findings and related legal
proceedings could have a material adverse impact on the Company.
Approximately
44 purported class action lawsuits have been filed in the U.S. against the
Company and certain foreign and domestic air carriers alleging that the
defendants violated U.S. antitrust laws by illegally conspiring to set prices
and surcharges on cargo shipments. These cases, along with other
purported class action lawsuits in which the Company was not named, were
consolidated in the United States District Court for the Eastern District of New
York as In re Air
Cargo Shipping Services Antitrust Litigation, 06-MD-1775 on June 20,
2006. Plaintiffs are
seeking trebled money damages and injunctive relief. The Company has
not been named as a defendant in the consolidated complaint filed by the
plaintiffs. However, the plaintiffs have not released any claims that
they may have against the Company, and the Company may later be added as a
defendant in the litigation. If the Company is sued on these claims, it will
vigorously defend the suit, but any adverse judgment could have a material
adverse impact on the Company. Also, on January 23, 2007, the
Company was served with a purported class action complaint filed against the
Company, American, and certain foreign and domestic air carriers in the Supreme
Court of British Columbia in Canada (McKay v. Ace Aviation
Holdings, et al.). The plaintiff alleges that the defendants violated
Canadian competition laws by illegally conspiring to set prices and surcharges
on cargo shipments. The complaint seeks compensatory and punitive damages
under Canadian law. On June 22, 2007, the plaintiffs agreed to dismiss
their claims against the Company. The dismissal is without prejudice
and the Company could be brought back into the litigation at a future
date. If litigation is recommenced against the Company in the
Canadian courts, the Company will vigorously defend itself; however, any adverse
judgment could have a material adverse impact on the Company.
On June
20, 2006, the DOJ served the Company with a grand jury subpoena as part of an
ongoing investigation into possible criminal violations of the antitrust laws by
certain domestic and foreign passenger carriers. At this time, the Company does
not believe it is a target of the DOJ investigation. The Company intends
to cooperate fully with this investigation. On September 4, 2007, the Attorney
General of the State of Florida served the Company with a Civil Investigative
Demand as part of its investigation of possible violations of federal and
Florida antitrust laws regarding the pricing of air passenger
transportation. In the event that this or other investigations
uncover violations of the U.S. antitrust laws or the competition laws of some
other jurisdiction, such findings and related legal proceedings could have a
material adverse impact on the Company.
Approximately
52 purported class action lawsuits have been filed in the U.S. against the
Company and certain foreign and domestic air carriers alleging that the
defendants violated U.S. antitrust laws by illegally conspiring to set prices
and surcharges for passenger transportation. On October 25, 2006,
these cases, along with other purported class action lawsuits in which the
Company was not named, were consolidated in the United States District Court for
the Northern District of California as In re International Air
Transportation Surcharge Antitrust Litigation, Civ. No. 06-1793 (the
“Passenger MDL”). On July 9, 2007, the Company was named as a
defendant in the Passenger MDL. On March 13, 2008, and March 14,
2008, two additional purported class action complaints, Turner v. American Airlines,
et al., Civ. No. 08-1444 (N.D. Cal.), and LaFlamme v. American
Airlines, et al., Civ. No. 08-1079 (E.D.N.Y.), were filed against the
Company, alleging that the Company violated U.S. antitrust laws by illegally
conspiring to set prices and surcharges for passenger transportation in Japan
and Germany, respectively. Plaintiffs in the Turner and LaFlamme cases are
seeking trebled money damages and injunctive relief. The Company
vigorously will defend these lawsuits, but any adverse judgment in these actions
could have a material adverse impact on the Company.
American
is defending a lawsuit (Love Terminal Partners, L.P.
et al. v. The City of Dallas, Texas et al.) filed on July 17, 2006 in the
United States District Court in Dallas. The suit was brought by two
lessees of facilities at Dallas Love Field Airport against American, the cities
of Fort Worth and Dallas, Southwest Airlines, Inc., and the Dallas/Fort Worth
International Airport Board. The suit alleges that an agreement by and
between the five defendants with respect to Dallas Love Field violates Sections
1 and 2 of the Sherman Act. Plaintiffs seek injunctive relief and
compensatory and statutory damages. On October 31, 2007, the court entered
an order dismissing all of the plaintiffs’ claims. The plaintiffs
have appealed. American will vigorously defend this lawsuit; however,
any adverse judgment could have a material adverse impact on the
Company.
On August
21, 2006, a patent infringement lawsuit was filed against American and American
Beacon Advisors, Inc. (a wholly-owned subsidiary of the Company), in the United
States District Court for the Eastern District of Texas (Ronald A. Katz Technology
Licensing, L.P. v. American Airlines, Inc., et al.). This case
has been consolidated in the Central District of California for pre-trial
purposes with numerous other cases brought by the plaintiff against other
defendants. The plaintiff alleges that American and American Beacon infringe a
number of the plaintiff’s patents, each of which relates to automated telephone
call processing systems. The plaintiff is seeking past and future
royalties, injunctive relief, costs and attorneys' fees. Although the
Company believes that the plaintiff’s claims are without merit and is vigorously
defending the lawsuit, a final adverse court decision awarding substantial money
damages or placing material restrictions on existing automated telephone call
system operations would have a material adverse impact on the
Company.
Item 5. Other
Information
American has announced a
pay plan, funded at 1.5 percent of base salaries, for all American employees on
U.S. payroll, to be effective May 1, 2008. On April 16, 2008,
American’s Board of Directors approved a 1.5 percent increase in the base
salaries for officers (including the executive officers of AMR), to be effective
May 1, 2008.
Item
6. Exhibits
The
following exhibits are included herein:
|
12
|
Computation
of ratio of earnings to fixed charges for the three months ended March 31,
2008 and 2007.
|
|
13.1
|
Purchase
Agreement No. 1977 Supplement No. 25 dated March 12,
2008.
|
|
13.2
|
Purchase
Agreement No. 1977 Supplement No. 26 dated April 11,
2008.
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Rule
13a-14(a).
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule
13a-14(a).
|
|
32
|
Certification
pursuant to Rule 13a-14(b) and section 906 of the Sarbanes-Oxley Act of
2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18,
United States Code).
|
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
AMERICAN AIRLINES, INC.
Date: April
18, 2008 BY: /s/ Thomas W.
Horton
Thomas W. Horton
Executive Vice President and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
Exhibit
12
AMERICAN
AIRLINES, INC.
Computation
of Ratio of Earnings to Fixed Charges
(in
millions)
|
Three
Months Ended March 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Earnings
(loss):
|
||||||||
|
Earnings
(loss) before income taxes
|
$ | (344 | ) | $ | 51 | |||
|
Add: Total
fixed charges (per below)
|
370 | 434 | ||||||
|
Less: Interest
capitalized
|
5 | 9 | ||||||
|
Total
earnings (loss) before income taxes
|
$ | 21 | $ | 476 | ||||
|
Fixed
charges:
|
||||||||
|
Interest
|
$ | 163 | $ | 207 | ||||
|
Portion
of rental expense representative of the interest factor
|
205 | 224 | ||||||
|
Amortization
of debt expense
|
2 | 3 | ||||||
|
Total
fixed charges
|
$ | 370 | $ | 434 | ||||
|
Ratio
of earnings to fixed charges
|
0.06 | 1.10 | ||||||
|
Coverage
deficiency
|
$ | 349 | $ | - | ||||
|
|
Note:As
of March 31, 2008 American has guaranteed approximately $1.1 billion of
AMR’s unsecured debt
|
|
|
and
approximately $327 million of AMR Eagle’s secured debt. The
impact of these unconditional guarantees is not included in the above
computation
|
&#
160; Exhibit
13.1
PURCHASE
AGREEMENT No. 1977 SUPPLEMENT No. 25
PURCHASE AGREEMENT No. 1977 SUPPLEMENT
No. 25 (this “Agreement”) dated March____, 2008 between
The Boeing Company (“Boeing”) and American Airlines, Inc.
(“Customer”).
R E C I T A L S:
|
A.
|
Boeing
and Customer have heretofore entered into that certain Purchase Agreement
No. 1977, dated October 31, 1997, as amended and supplemented,
(capitalized terms used herein without definition shall have the meanings
specified therefor in such Purchase
Agreement).
|
|
B.
|
Pursuant
to Letter Agreement No. 6-1162-AKP-075 (the “Rights Letter”), Boeing and
Customer have agreed to, among other things, treatment of aircraft
Purchase Rights.
|
|
C.
|
Customer
and Boeing desire to amend and supplement the Purchase Agreement as
provided below.
|
In
consideration of the foregoing premises and other good and sufficient
consideration, Boeing and Customer hereby agree as follows:
|
1.
|
Amendment
to Reflect Customer’s Exercise of MADP
Rights.
|
|
1.1.
|
The Purchase
Agreement is amended and supplemented to reflect the exercising of
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] Rights Aircraft
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] by Customer with
the Scheduled Delivery [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] (“Exercised MADP
Aircraft”).
|
|
1.2.
|
The
Scheduled Delivery Month and Advanced Payment Schedule for the aircraft is
set forth in Table 1A (R4), attached
hereto.
|
|
|
1.3. In
recognition of the fact the configuration of Customer’s Model 737-823
Aircraft is in the process of being updated, the previously selected
Optional Features that were selected during initial configuration for the
Deferred Aircraft will be incorporated in Table 1A(R4) as a placeholder
until Customer selects Optional Features or other desired amendments to
the Detail Specification (”Configuration Changes”). The effects of all
Configuration Changes, which are mutually agreed upon between Boeing and
Customer for incorporation into the Detail Specification will be
incorporated into Exhibit A by written amendment no later than [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT].
|
|
2.
|
Table
of Contents. The Table of
Contents dated February 2008 is replaced in its entirety with the revised
Table of Contents dated March 2008 (Attachment A hereto) to reflect
amendments made to the Purchase Agreement by this
Agreement.
|
|
3.
|
MADP
Rights. Pursuant to SA 24, Attachment B (R5) to the
Rights Letter is hereby replaced in its entirety with the revised
Attachment B (R6) attached hereto and hereby made part of the Purchase
Agreement. The revised number of certain Customer MADP rights pursuant to
this Agreement are reflected in the attached Attachment B (R6)
hereto.
|
|
4.
|
Supplement
Exhibit BFE1. Supplement Exhibit
BFE1 (R5) is hereby replaced in its entirety with the revised Supplement
Exhibit BFE1 (R6) attached hereto and hereby made part of the Purchase
Agreement. The updated on-dock dates for all contracted firm Aircraft thru
December 2013 are reflected in the attached Supplement Exhibit BFE1
(R6).
|
|
5.
|
Advance
Payments for Aircraft. Due at signing of
this Agreement, Customer owes Boeing [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
|
|
6.
|
Effect
on Purchase Agreement. Except as expressly set forth
herein, all terms and provisions contained in the Purchase Agreement shall
remain in full force and effect. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all previous proposals, and agreements, understandings,
commitments or representations whatsoever, oral or written, with respect
to the subject matter hereof and may be changed only in writing signed by
authorized representatives of the
parties.
|
IN
WITNESS WHEREOF, Boeing and Customer have each caused this
Agreement
to be
duly executed as of the day and year first above written.
|
AMERICAN
AIRLINES, INC.
By
Its
VP Corporate Development
and Treasurer
|
THE
BOEING COMPANY
[Missing
Graphic Reference]
By
Its Attorney-In-Fact
|
|
|
Attachments:
|
|
|
Attachment
A, Table of Contents (R6) to Purchase Agreement No.
1977
|
|
|
Table
1A (R4) to Purchase Agreement No. 1977, 737-800 Exercised Option Delivery,
Description, Price and Advance
Payments
|
|
|
Attachment
B (R6) to Letter Agreement 6-1162-AKP-075, Aircraft Purchase Rights and
Substitution Rights
|
|
|
Supplement
Exhibit BFE1 (R6) to Purchase Agreement No. 1977, 737-823 BFE
Variables
|
TABLE OF
CONTENTS
SA
ARTICLES NUMBER
1. Quantity,
Model and
Description SA21
2. Delivery
Schedule
3. Price
4. Payment
5. Miscellaneous
TABLE
1(R3) Aircraft
Delivery, Description, Price and SA23
Advance Payments
-Schedule 1
(R2) SA23
1A (R4) Option
Aircraft Delivery, Description, Price
and SA25
Advance Payments
EXHIBITS
A. Aircraft
Configuration
B. Aircraft
Delivery Requirements and Responsibilities
C. Defined
Terms
SUPPLEMENTAL
EXHIBITS
AE1 Escalation
Adjustment Airframe and Optional Features SA20
BFE1(R6) BFE
VariablesSA25
CS1 Customer
Support Variables
SLP1 Service
Life Policy Components
EE1 Engine
Escalation, Engine Warranty and Patent Indemnity
LETTER
AGREEMENTS
6-1162-AKP-070Miscellaneous
Commitments for Model 737, 757,
767 and 777 Aircraft
6-1162-AKP-071 Purchase
Obligations
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
6-1162-AKP-074R2 Business
Considerations
6-1162-AKP-075Aircraft
Purchase Rights and Substitution Rights
- Attachment A
- Attachment B(R6) SA25
- Attachment
C(R3) SA23
6-1162-AKP-076 Aircraft
Performance Guarantees
6-1162-AKP-077 Spares
Matters
6-1162-AKP-078 Model
737 Miscellaneous Commitments
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
6-1162-AKP-080 Installation
of Cabin Systems Equipment
6-1162-AKP-081 Model
737 Maintenance Cost Commitment
6-1162-AKP-082 Confidentiality
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
6-1162-AKP-117 Delivery
Schedule
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
|
|
Table1A
(R4) to Purchase Agreement No 1977
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
|
|
Attachment
B (R6) to Letter Agreement 6-1162-AKP-075 (Model
737)
|
[CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
|
|
Attachment
B (R6) to Letter Agreement 6-1162-KP-075 (Model
737)
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
BUYER
FURNISHED EQUIPMENT VARIABLES
between
THE
BOEING COMPANY
and
AMERICAN
AIRLINES, INC.
Supplemental
Exhibit BFE1 to Purchase Agreement Number 1977
BUYER
FURNISHED EQUIPMENT VARIABLES
relating
to
BOEING
MODEL 737 AIRCRAFT
This
Supplemental Exhibit BFE1 contains vendor selection dates, on-dock dates and
other variables applicable to the Aircraft.
1. Supplier
Selection.
Customer will:
1.1 Select
and notify Boeing of the suppliers and part numbers of the following BFE items
by the following dates:
Galley
System Complete
Galley
Inserts Complete
Seats
(passenger) Complete
Cabin Systems
Equipment Complete
Miscellaneous Emergency
Equipment Complete
Cargo Handling
Systems Complete
For a new certification,
supplier requires notification [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] to
Cargo Handling System on-dock date.
2. On-dock
Dates
On
or before [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT], Boeing will provide to Customer a BFE
Requirements On-Dock/Inventory Document (BFE Document) or an electronically
transmitted BFE Report which may be periodically revised, setting forth the
items, quantities, on-dock dates and shipping instructions relating to the
in-sequence installation of BFE. For planning purposes, a preliminary
BFE on-dock schedule is set forth below:
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
Galleys/Furnishings
|
|
|
Antennas
& Mounting Equipment
|
|
|
Avionics
|
|
|
Cabin
Systems Equipment
|
|
|
Miscellaneous
Emergency Equipment
|
|
|
Textiles/Raw
Material
|
|
|
Cargo
Systems
|
|
|
Provision
Kits
|
|
|
Winglets
|
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
Galleys/Furnishings
|
|
|
Antennas
& Mounting Equipment
|
|
|
Avionics
|
|
|
Cabin
Systems Equipment
|
|
|
Miscellaneous
Emergency Equipment
|
|
|
Textiles/Raw
Material
|
|
|
Cargo
Systems
|
|
|
Provision
Kits
|
|
|
Winglets
|
|
3.
|
Additional
Delivery Requirements
|
Customer
will insure that Customer’s BFE suppliers provide sufficient information to
enable Boeing, when acting as Importer of Record for Customer’s BFE, to comply
with all applicable provisions of the U.S. Customs Service.
Exhibit 13.2
PURCHASE
AGREEMENT No. 1977 SUPPLEMENT No. 26
PURCHASE AGREEMENT No. 1977 SUPPLEMENT
No. 26 (this “Agreement”) dated April__________, 2008 between The Boeing Company
(“Boeing”) and American Airlines, Inc. (“Customer”).
R E C I T A L S:
|
A.
|
Boeing
and Customer have heretofore entered into that certain Purchase Agreement
No. 1977, dated October 31, 1997, as amended and supplemented,
(capitalized terms used herein without definition shall have the meanings
specified therefor in such Purchase
Agreement).
|
|
B.
|
Pursuant
to Letter Agreement No. 6-1162-AKP-075 (the “Rights Letter”), Boeing and
Customer have agreed to, among other things, treatment of aircraft
Purchase Rights.
|
|
C.
|
Pursuant
to Letter Agreement No. 6-1162-LAJ-936, Boeing and Customer have agreed
to, among other things, treatment of acceleration of Deferred
Aircraft.
|
|
D.
|
Pursuant to Purchase Agreement
No. 1977 Supplement Agreement No. 19 (“SA 19”), Boeing and Customer have
agreed to, among other things, [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT].
|
|
E.
|
Customer
and Boeing desire to amend and supplement the Purchase Agreement as
provided below.
|
In
consideration of the foregoing premises and other good and sufficient
consideration, Boeing and Customer hereby agree as follows:
|
1.
|
Amendment
to Reflect Customer’s [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
|
|
1.1.
|
The Purchase
Agreement is amended and supplemented to reflect the [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] Customer of the
Scheduled Delivery Month [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
|
|
1.2.
|
Pursuant to Section
6 of SA 19, as revised in Table 1(R3) in SA 23, [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
|
|
2.
|
Amendment
to Reflect Customer’s Exercise of MADP
Rights.
|
|
2.1.
|
The Purchase
Agreement is amended and supplemented to reflect the exercising of
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] Rights Aircraft
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] by Customer with
the Scheduled Delivery Month of July 2009 (“Exercised MADP
Aircraft”).
|
|
2.2.
|
The
Scheduled Delivery Month and Advanced Payment Schedule for the aircraft
are set forth in Table 1A(R5), attached
hereto.
|
|
2.3
|
In
recognition of the fact the configuration of Customer’s Model 737-823
Aircraft is in the process of being updated, the previously selected
Optional Features that were selected during initial configuration for the
Deferred Aircraft will be incorporated in Table 1A(R5) as a placeholder
until Customer selects Optional Features or other desired amendments to
the Detail Specification (”Configuration Changes”). The effects of all
Configuration Changes, which are mutually agreed upon between Boeing and
Customer for incorporation into the Detail Specification will be
incorporated into Exhibit A by written amendment no later than [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT].
|
|
3.
|
Table
of Contents. The Table of
Contents dated March 2008 is replaced in its entirety with the revised
Table of Contents dated April 2008 (Attachment A hereto) to reflect
amendments made to the Purchase Agreement by this
Agreement.
|
|
4.
|
[CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
|
|
4.1.
|
Table
1(R3) to the Purchase Agreement is hereby replaced in its entirety with
the revised Table 1(R4) attached hereto and hereby made a part of the
Purchase Agreement [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT].
|
|
4.2.
|
In
recognition of the fact the configuration of Customer’s Model 737-823
Aircraft is in the process of being updated, the previously selected
Optional Features that were selected during initial configuration for the
Deferred Aircraft will be incorporated in Table 1(R4) as a placeholder
until Customer selects Optional Features or other desired amendments to
the Detail Specification (”Configuration Changes”). The effects of all
Configuration Changes, which are mutually agreed upon between Boeing and
Customer for incorporation into the Detail Specification will be
incorporated into Exhibit A by written amendment no later than [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT].
|
|
5.
|
MADP
and QADP Rights. Pursuant to SA 25, Attachment B (R6)
and to SA 23 Attachment C (R3) to the Rights Letter are hereby replaced in
their entirety with the revised Attachment B (R7) and Attachment C (R4)
attached hereto and hereby made part of the Purchase Agreement. The
revised number of certain Customer MADP rights and QADP rights pursuant to
this Agreement are reflected in the attached Attachment B (R7) and
Attachment C (R4) hereto.
|
|
6.
|
Supplement
Exhibit BFE1. Supplement Exhibit
BFE1 (R6) is hereby replaced in its entirety with the revised Supplement
Exhibit BFE1 (R7) attached hereto and hereby made part of the Purchase
Agreement. The updated on-dock dates for all contracted firm Aircraft thru
December 2013 are reflected in the attached Supplement Exhibit BFE1
(R7).
|
|
|
7
|
Advance
Payments for Aircraft. Due at signing of
this Agreement, Customer owes Boeing [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
|
|
8.
|
Effect
on Purchase Agreement. Except as expressly set forth
herein, all terms and provisions contained in the Purchase Agreement shall
remain in full force and effect. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all previous proposals, and agreements, understandings,
commitments or representations whatsoever, oral or written, with respect
to the subject matter hereof and may be changed only in writing signed by
authorized representatives of the
parties.
|
IN
WITNESS WHEREOF, Boeing and Customer have each caused this
Agreement
to be
duly executed as of the day and year first above written.
|
AMERICAN
AIRLINES, INC.
By
Its VP Corporate Development
and Treasurer
|
THE
BOEING COMPANY
[Missing
Graphic Reference]
By
Its Attorney-In-Fact
|
|
|
Attachments:
|
|
|
Attachment
A, Table of Contents (R7) to Purchase Agreement No.
1977
|
Table
1(R4) to Purchase Agreement No. 1977, 737-800 Aircraft Delivery, Description,
Price and Advance Payments
|
|
Table
1A (R5) to Purchase Agreement No. 1977, 737-800 Exercised Option Delivery,
Description, Price and Advance
Payments
|
|
|
Attachment
B (R7) to Letter Agreement 6-1162-AKP-075, Aircraft Purchase Rights and
Substitution Rights
|
|
|
Attachment
C (R4) to Letter Agreement 6-1162-AKP-075, Aircraft Purchase Rights and
Substitution Rights
|
|
|
Supplement
Exhibit BFE1 (R7) to Purchase Agreement No. 1977, 737-823 BFE
Variables
|
TABLE OF
CONTENTS
SA
ARTICLES NUMBER
1. Quantity,
Model and
Description SA21
2. Delivery
Schedule
3. Price
4. Payment
5. Miscellaneous
TABLE
1(R4) Aircraft
Delivery, Description, Price and SA26
Advance Payments
-Schedule 1
(R2) SA23
1A (R5) Option
Aircraft Delivery, Description, Price
and SA26
Advance Payments
EXHIBITS
A. Aircraft
Configuration
B. Aircraft
Delivery Requirements and Responsibilities
C. Defined
Terms
SUPPLEMENTAL
EXHIBITS
AE1 Escalation
Adjustment Airframe and Optional Features SA20
BFE1(R7) BFE
VariablesSA26
CS1 Customer
Support Variables
SLP1 Service
Life Policy Components
EE1 Engine
Escalation, Engine Warranty and Patent Indemnity
LETTER
AGREEMENTS
6-1162-AKP-070Miscellaneous
Commitments for Model 737, 757,
767 and 777 Aircraft
6-1162-AKP-071 Purchase
Obligations
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
6-1162-AKP-074R2 Business
Considerations
6-1162-AKP-075Aircraft
Purchase Rights and Substitution Rights
- Attachment A
- Attachment B(R7) SA26
- Attachment C(R4) SA26
6-1162-AKP-076 Aircraft
Performance Guarantees
6-1162-AKP-077 Spares
Matters
6-1162-AKP-078 Model
737 Miscellaneous Commitments
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
6-1162-AKP-080 Installation
of Cabin Systems Equipment
6-1162-AKP-081 Model
737 Maintenance Cost Commitment
6-1162-AKP-082 Confidentiality
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
6-1162-AKP-117 Delivery
Schedule
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
|
|
Table
1 (R4) to Purchase Agreement No.
1977
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Table
1 (R4) to Purchase Agreement No.
1977
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Table
1 (R4) to Purchase Agreement No.
1977
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Table
1A (R5) to Purchase Agreement No.
1977
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Attachment
B (R7) to Letter Agreement 6-1162-AKP-075 (Model
737)
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Table
B (R7) to Letter Agreement 6-1162-AKP-075 (Model
737)
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Attachment
C (R4) to Letter Agreement 6-1162-AKP-075 (Model
737)
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
|
|
Attachment
C (R4) to Letter Agreement 6-1162-AKP-075 (Model
737)
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
BUYER
FURNISHED EQUIPMENT VARIABLES
between
THE
BOEING COMPANY
and
AMERICAN
AIRLINES, INC.
Supplemental
Exhibit BFE1 to Purchase Agreement Number 1977
BUYER
FURNISHED EQUIPMENT VARIABLES
relating
to
BOEING
MODEL 737 AIRCRAFT
This
Supplemental Exhibit BFE1 contains vendor selection dates, on-dock dates and
other variables applicable to the Aircraft.
1. Supplier
Selection.
Customer will:
1.1 Select
and notify Boeing of the suppliers and part numbers of the following BFE items
by the following dates:
Galley
System Complete
Galley
Inserts Complete
Seats
(passenger) Complete
Cabin Systems
Equipment Complete
Miscellaneous Emergency
Equipment Complete
Cargo Handling
Systems Complete
For a new certification,
supplier requires notification [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
to Cargo
Handling System on-dock date.
2. On-dock
Dates
On
or before [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT], Boeing will provide to Customer a BFE
Requirements On-Dock/Inventory Document (BFE Document) or an electronically
transmitted BFE Report which may be periodically revised, setting forth the
items, quantities, on-dock dates and shipping instructions relating to the
in-sequence installation of BFE. For planning purposes, a preliminary
BFE on-dock schedule is set forth below:
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Galleys/Furnishings
|
||
|
Antennas
& Mounting Equipment
|
||
|
Avionics
|
||
|
Cabin
Systems Equipment
|
||
|
Miscellaneous
Emergency Equipment
|
||
|
Textiles/Raw
Material
|
||
|
Cargo
Systems
|
||
|
Provision
Kits
|
||
|
Winglets
|
||
Item Preliminary On-Dock
Dates
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
|
Aircraft
|
|
|
Seats
|
[CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
|
|
Galleys/Furnishings
|
|
|
Antennas
& Mounting Equipment
|
|
|
Avionics
|
|
|
Cabin
Systems Equipment
|
|
|
Miscellaneous
Emergency Equipment
|
|
|
Textiles/Raw
Material
|
|
|
Cargo
Systems
|
|
|
Provision
Kits
|
|
|
Winglets
|
|
3.
|
Additional
Delivery Requirements
|
Customer
will insure that Customer’s BFE suppliers provide sufficient information to
enable Boeing, when acting as Importer of Record for Customer’s BFE, to comply
with all applicable provisions of the U.S. Customs
Service.
Exhibit
31.1
I, Gerard
J. Arpey, certify that:
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of American Airlines,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date: April
18, 2008 /s/ Gerard J.
Arpey
Gerard J. Arpey
Chairman, President and Chief
Executive Officer
Exhibit 31.2
I, Thomas
W. Horton, certify that:
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of American Airlines,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date: April
18, 2008 /s/ Thomas W.
Horton
Thomas W. Horton
Executive Vice President and Chief
Financial Officer
Exhibit
32
American
Airlines, Inc.
Certification
Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections
(a) and (b) of Section 1350, Chapter 63 of Title 18, United States
Code)
Pursuant
to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of
section 1350, chapter 63 of title 18, United States Code), each of the
undersigned officers of American Airlines, Inc., a Delaware corporation (the
Company), does hereby certify, to such officer’s knowledge, that:
The
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (the Form
10-Q) of the Company fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 and information contained in the
Form 10-Q fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Date: April
18, 2008 /s/ Gerard J.
Arpey
Gerard J. Arpey
Chairman, President and Chief
Executive Officer
Date: April
18, 2008 /s/ Thomas W.
Horton
Thomas W. Horton
Executive Vice President and Chief
Financial Officer
The
foregoing certification is being furnished solely pursuant to section 906 of the
Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63
of title 18, United States Code) and is not being filed as part of the Form 10-Q
or as a separate disclosure document.