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    AMR Corporation Continues Efforts to Strengthen Its Balance Sheet

    AMR Corp., parent company of American Airlines, Inc. and American Eagle Airlines, Inc., said today that American Airlines intends to prepay $545 million in aircraft debt in the fourth quarter of 2007 as part of AMR's ongoing efforts to buttress its financial foundation and strengthen its balance sheet.

    The prepayment is expected to take place toward the end of the fourth quarter during the first available prepayment window. The prepayment, which would be in addition to AMR's $1.3 billion in scheduled principal payments in 2007, is expected to initially eliminate approximately $25 million of annual net interest expense and release 16 aircraft used to secure the loan, which has been outstanding since December 2002 and is scheduled to mature in December 2012. The Company emphasized that any final determination to prepay this debt, and any decisions to prepay other debt, will depend on future economic and industry conditions, the financial condition of the Company, and other factors -- many of which are beyond the Company's control.

    AMR also said that its wholly-owned subsidiary, American Eagle Airlines, Inc., made a $32 million aircraft debt prepayment in the third quarter that brought AMR's prepayment of debt on its Canadair regional jets to $159 million this year -- all of the prepayments were in addition to scheduled principal payments. The final payment in July released 10 CRJ-700 aircraft that were used to secure the debt and which are operated by American Eagle Airlines.

    "With our improving financial performance, we have bolstered our liquidity position and we have opportunistically strengthened our balance sheet by reducing debt," said Thomas W. Horton, Executive Vice President of Finance and Planning and Chief Financial Officer of AMR. "While we have more work to do, our recent decisions not only improve our balance sheet, but also reduce our interest burden going forward and give us more financial flexibility for the future."

    The plans and actions disclosed today are in addition to actions taken by the Company in the first half of 2007 including debt prepayments, bond refinancings and the lowering of the interest rate on a credit facility. These actions eliminated an incremental $27 million of annual net interest expense, in addition to the net interest expense savings from AMR's scheduled debt amortization. As a result of scheduled principal payments as well as incremental efforts to strengthen its balance sheet, the Company estimates that its net interest expense for the nine months ended Sept. 30, 2007, will be approximately $130 million lower than its net interest expense for the same period in 2006.

    Going forward, depending on market conditions, the Company's cash position, and other considerations, the Company may from time to time refinance, redeem or repurchase its debt or take other steps to reduce its debt or lease obligations or otherwise improve its balance sheet.

    AMR expects to end the third quarter of 2007 with approximately $5.7 billion in cash and short-term investments, including a restricted balance of approximately $450 million. That compares to a cash and short-term investment balance of $5.5 billion, including a restricted balance of $464 million, at the end of the third quarter of 2006.

    The Company expects to end the third quarter of 2007 with Total Debt, which the Company defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, of approximately $16.6 billion. AMR's Total Debt was approximately $19 billion at the end of the third quarter of 2006 and approximately $20.1 billion at the end of 2005.

    The Company expects to end the third quarter of 2007 with Net Debt, which the Company defines as Total Debt less unrestricted cash and short-term investments, of approximately $11.3 billion, compared to Net Debt of approximately $14.0 billion at the end of the third quarter of 2006 and approximately $16.3 billion at the end of 2005.

    Note: The Company believes the Total Debt and Net Debt metrics assist investors in understanding changes in the Company's balance sheet and the results of its efforts to build a financial foundation under the Company's Turnaround Plan.

    * The Company's estimates could differ from actual results.

    Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events. When used in this release, the words "expects," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook", "may," "will," "should" 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; overall economic conditions; plans and objectives for future operations; and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact. Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. This release includes forecasts of total debt and net debt, and statements regarding the Company's liquidity, each of which is a forward-looking statement. 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 and reorganizing carriers; low fares by historical standards and the Company's reduced pricing power; the Company's potential 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 Annual Report on Form 10-K/A for the year ended December 31, 2006.

    Current AMR Corp. news releases can be accessed on the Internet. The address

    is: http://www.aa.com/.

    First Call Analyst:
    FCMN Contact: rick.wilbins@aa.com

    SOURCE: AMR Corporation

    CONTACT: Andy Backover or Tim Wagner of Corporate Communications, Fort
    Worth, Texas, +1-817-967-1577, corp.comm@aa.com

    Web site: http://www.aa.com/

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