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AMR Corporation Reports a First Quarter Profit of $81 Million, a $173 Million Improvement Year Over Year

Despite Weather Impact, Company Continues Momentum With Fourth Consecutive Profitable Quarter

AMR Corporation , the parent company of American Airlines, Inc., today reported a net profit of $81 million for the first quarter of 2007, or $0.30 per diluted share.

The current quarter results compare to a net loss of $92 million, or $0.49 per diluted share, in the first quarter of 2006.

"In spite of significant weather challenges, we continued to build on our momentum by generating a profit in the first quarter. This is our fourth consecutive profitable quarter and the first time we have generated a profit in the first quarter since 2000," said AMR Chairman and CEO Gerard Arpey. "We strengthened our balance sheet and liquidity, took a key step in our fleet renewal plan and reinvested in our products and services. While we must continue to improve our financial performance, we believe our results show that we have started 2007 on the right track."

Operational Performance

American's mainline passenger revenue per available seat mile (unit revenue) increased by 4.5 percent in the first quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the first quarter decreased 2.5 percent compared to the same period in 2006.

American's mainline load factor -- or the percentage of total seats filled -- was a record 78.1 percent during the first quarter, compared to 77.2 percent in the first quarter of 2006. American's first-quarter yield, which represents average fares, increased 3.3 percent compared to the first quarter of 2006, its eighth consecutive quarter of year-over-year yield increases.

AMR reported first quarter consolidated revenues of approximately $5.4 billion, an increase of 1.6 percent year over year. AMR estimates that severe weather disruptions reduced first quarter consolidated revenue by approximately $60 million.

American's mainline cost per available seat mile (unit cost) in the first quarter was up 0.9 percent year over year, which was 1.6 percentage points higher than originally anticipated largely because of weather impacts that caused American to cancel 2.9 percent of mainline scheduled departures for the first quarter. Excluding fuel, mainline unit costs in the first quarter increased by 2.2 percent year over year.

Balance Sheet Improvement

Arpey noted that AMR continued to strengthen its balance sheet in the first quarter by reducing debt and improving its liquidity position.

AMR ended the first quarter with $5.9 billion in cash and short-term investments, including a restricted balance of $471 million, compared to a balance of $4.8 billion in cash and short-term investments, including a restricted balance of $510 million, at the end of the first quarter of 2006.

AMR reduced Total Debt, which it 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, to $17.5 billion at the end of the first quarter of 2007, compared to $19.7 billion a year earlier. AMR reduced Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, from $15.4 billion at the end of the first quarter of 2006 to $12.2 billion in the first quarter of 2007.

AMR contributed $62 million to its employees' defined benefit pension plans in the first quarter and made an additional $118 million contribution on April 13, as the Company continues to meet this important commitment to its employees.

"As we continue to execute on our Turnaround Plan, we are seeking to strike the right balance between reinvestment in the business and the need for further financial improvement," Arpey said. "We have more hard work ahead of us, but we believe that we have the right strategy in place to continue building our company for the long term and to continue delivering benefits to shareholders, customers and employees."

First Quarter Highlights  
-- American announced that it had notified Boeing of its intent to begin pulling forward deliveries of 47 737-800 aircraft to replace a portion of its MD-80 fleet, with the first three aircraft scheduled for delivery in early 2009. Arpey cited the fleet renewal announcement as a key step toward American's goal of improving fleet fuel efficiency by more than 20 percent by 2020.  
-- American announced that it would invest up to $100 million in facility, technology and process improvements to help its Maintenance,      Repair and Overhaul (MRO) business compete for more third-party maintenance contracts. American's MRO business generated nearly $95 million in third-party revenue in 2006.  
-- AMR continued to improve its balance sheet by paying down the $285 million balance on its revolving credit facility and by prepaying $79 million in aircraft debt. In April, the Company also completed the refinancing of $350 million of tax-exempt bonds. These actions are expected to eliminate approximately $15 million in annual net interest expense for the Company.  
-- AMR improved its financial strength by selling 13 million new shares of common stock to raise nearly $500 million.  
-- AMR was honored by PLANSPONSOR Magazine as Corporate Plan Sponsor of the Year for the Company's efforts to protect and preserve its      employees' defined benefit pension plans. In addition to contributing more than $1.5 billion to its employees' defined benefit pension plans      since 2002, the Company expects to contribute $364 million to these plans in 2007. Through April 13, AMR had made $180 million of its      expected 2007 contributions.  
-- AMR began to accrue for a potential profit sharing payout to employees for the 2007 year, payable in 2008. There can be no assurance that the Company's forecast will approximate actual results, which are dependent upon many factors, including fuel prices and economic and      industry conditions.  
-- American launched an initiative to become the clear airline of choice for passengers in the New York market, with its commitment      demonstrated by additional routes, enhanced offers and promotions.  
-- American launched a new online booking tool on AA.com that makes it easier and more convenient for AAdvantage program members to redeem earned miles for travel.  
-- American announced that it began installing new personal video and audio entertainment devices in Business Class cabins on its 58 Boeing      767-300 aircraft.  Guidance for the Second Quarter and 2007 Mainline and Consolidated Capacity

AMR expects its full-year mainline capacity to decrease by 1.8 percent in 2007 compared to 2006, with a 2.0 percent reduction in domestic capacity and a 0.9 percent decrease in international capacity. On a consolidated basis, AMR expects full-year capacity to decrease by 1.5 percent in 2007 compared to 2006. The impact of weather-related cancellations that occurred in the first quarter is included in mainline and consolidated capacity forecasts for 2007.

AMR expects mainline capacity in the second quarter of 2007 to decrease by 3.1 percent year over year. It expects consolidated capacity to decrease by 2.9 percent in the second quarter of 2007 compared to the prior-year period.

Fuel Expense and Hedging

While the cost of jet fuel remains volatile, as of now AMR is planning for an average system price of $2.09 per gallon in the second quarter and $2.09 per gallon for all of 2007. AMR has 34 percent of its anticipated second quarter fuel consumption capped at an average crude equivalent of $65 per barrel (jet fuel equivalent of $2.04 per gallon), with 26 percent of its anticipated full-year consumption capped at an average crude equivalent of $63 per barrel (jet fuel equivalent of $1.96 per gallon). Consolidated consumption for the second quarter is expected to be 791 million gallons of jet fuel.

Mainline and Consolidated Unit Costs

AMR continues to target $300 million in incremental savings for 2007. It expects mainline unit costs excluding fuel to be 1.1 percent higher in 2007 versus 2006 while 2007 consolidated unit costs excluding fuel are expected to increase 1.6 percent year over year.

In the second quarter, mainline unit costs excluding fuel are expected to increase 2.8 percent year over year while consolidated unit costs excluding fuel are expected to increase 3.1 percent from the second quarter of 2006.

Following the weather impact in the first quarter, full-year mainline unit costs are expected to increase 1.6 percent in 2007 compared to 2006, while full-year consolidated unit costs are expected to increase 2.0 percent in 2007 compared to 2006.

For the second quarter, mainline unit costs are expected to increase 2.1 percent compared to the second quarter of 2006, while second quarter consolidated unit costs are expected to increase 2.1 percent compared to the second quarter of 2006.

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," "seeks," "targets" and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company's objectives, plans or goals are forward-looking statements. Forward-looking statements include, without limitation, the Company's expectations concerning operations and financial condition, including changes in capacity, revenues and costs; future financing plans and needs; overall economic and industry conditions; plans and objectives for future operations; and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact. Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward- looking statement, whether as a result of new information, future events, or otherwise.

Forward-looking statements are subject to a number of 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 likely 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.

Detailed financial information follows:   



AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)
(Unaudited)
     
 Three Months Ended  
 March 31,  
 -------------------------------   
 20072006Percent Change 
 ------------------------------- 
Revenues    
 Passenger - American Airlines$4,326$4,2441.9 
                    - Regional Affiliates$558$569-1.9 
Cargo$201$1868.1 
Other Revenues$342$345-0.9 
 ------------------------------- 
Total Operating Revenues$5,427$5,3441.6 
 ------------------------------- 
     
Expenses    
 Wages, salaries and benefits$1,671$1,729-3.4 
 Aircraft fuel$1,410$1,473-4.3 
 Other rentals and landing fees$329$3164.1 
 Depreciation and amortization$290$2871.0 
 Commissions, booking fees and credit card expense$249$269-7.4 
 Maintenance, materials and repairs$248$2365.1 
 Aircraft rentals$151$1463.4 
 Food service$127$1242.4 
 Other operating expenses$704$6498.5 
 ------------------------------- 
Total operating expenses$5,179$5,229-1.0 
     
Operating Income (Loss)$248$115* 
     
Other Income (Expense)    
 Interest income$77$5345.3 
 Interest expense-$241-$261-7.7 
 Interest capitalized$9$728.6 
 Miscellaneous - net-$12-$6100.0 
 ------------------------------- 
 -$167-$207-19.3 
 ------------------------------- 
Income (Loss) Before Income    
 Taxes$81-$92* 
Income tax--------- 
 ------------------------------- 
Net Income (Loss)$81-$92* 
 =========================== 
     
Earnings (Loss) Per Share    
Basic$0.35-$0.49  
 ==================  
Diluted$0.30-$0.49  
 ==================  
     
Number of Shares Used in    
 Computation    
 Basic236186  
 Diluted298186  
     
*Greater than 100%    
     
AMR CORPORATION    
OPERATING STATISTICS    
(Unaudited)    
     
 Three Months Ended   
 March 31,   
 -------------------------------   
 20072006Percent Change 
 ------------------------------- 
American Airlines, Inc. Mainline Jet Operations   
 Revenue passenger miles (millions)$32,575$33,015-1.3 
 Available seat miles (millions)$41,691$42,752-2.5 
 Cargo ton miles (millions)$524$5210.6 
 Passenger load factor78.1%77.2%0.9 pts 
 Passenger revenue yield per passenger mile (cents)13.2812.853.3 
 Passenger revenue per available seat mile (cents)10.389.934.5 
 Cargo revenue yield per ton mile (cents)38.3635.657.6 
 Operating expenses per available seat mile, excluding Regional Affiliates (cents) (A)10.9110.810.9 
 Fuel consumption (gallons, in millions)692705-1.8 
 Fuel price per gallon (cents)184.2189.0-2.5 
     
Regional Affiliates    
 Revenue passenger miles (millions)22622277-0.7 
 Available seat miles (millions)327432570.5 
 Passenger revenue yield per passenger mile (cents)24.6424.97-1.3 
 Passenger revenue per available seat mile (cents)17.0317.46-2.5 
 Passenger load factor69.1%69.9%(0.8) pts. 
     
AMR Corporation    
Average Equivalent Number of Employees   
 American Airlines7150073200  
 Other1360013400  
 --------------------  
Total8510086600  
 ==================  
     
    (A) Excludes $668 million and $654 million of expense incurred related to 
        Regional Affiliates in 2007 and 2006, respectively.  
     
AMR CORPORATION
OPERATING STATISTICS

(Unaudited)
     
OPERATING STATISTICS BY REGIONAL ENTITY   
     
American Airlines, Inc Entity ResultsThree Months Ended
March 31,2007
 
  ----------------------------------  
 RASM (1) (cents)Y-O-Y ChangeASMs(2) (billions)Y-O-Y Change
 ----------------------------------------
DOT Domestic10.191.0%26.8-3.1%
International10.7111.3%14.9-1.4%
 DOT Latin America10.5410.3%7.81.3%
 DOT Atlantic9.949.7%5.4-2.1%
 DOT Pacific9.2919.3%1.7-10.5%
     
    (1) Revenue per Available Seat Mile   
    (2) Available Seat Miles    
     
American Airlines, Inc Entity ResultsThree Months Ended March 31,2007 
  ----------------------------------  
 Y-O-Y Load Factor (pts)Y-O-Y Change (pts)Yield (cents)Y-O-Y Change
 ----------------------------------------
DOT Domestic79.60.512.800.4%
International75.41.814.198.7%
 DOT Latin America75.91.415.217.3%
 DOT Atlantic72.8-0.313.6510.2%
 DOT Pacific82.17.311.328.7%
     
     
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)
 Three Months Ended  
 March 31,  
 -------------------------------   
(in millions, except as noted)20072006  
 --------------------  
American Airlines, Inc. Mainline Jet Operations   
 Total operating expenses$5,218$5,275  
 Less: Operating expenses incurred related to Regional Affiliates$668$654  
 Operating expenses excluding expenses incurred related to Regional Affiliates$4,550$4,621  
 American mainline jet operations available seat miles4169142752  
 --------------------  
 Operating expenses per available seat mile, excluding Regional Affiliates (cents)10.9110.81  
 ==================  
 Operating expenses, ecluding expenses incurred related to Regional Affiliates$4,550$4,621  
 Less: Fuel Expense12751332  
 --------------------  
 Operating expenses, ecluding expenses incurred related to Regional Affiliates and fuel expense$3,275$3,289  
 American mainline jet operations available seat miles12751332  
 --------------------  
 Operating expenses per available seat mile, excluding impact of special items and the cost of fuel (cents)7.867.69  
 ==================  
     
Percent change2.2%   
     
    Note: The Company believes that operating expenses per available seat 
          mile, excluding the cost of fuel, assists investors in understanding 
          the impact of fuel prices on the Company's operations.  
     
AMR Corporation
Calculation of Net Debt
 As of March 31  
 -------------------------------   
(in millions, except as noted)20072006  
 --------------------  
Current and long-term debt$11,885$13,340  
Current and long-term capital lease obligations$875$1,009  
Principal amount of certain airport facility tax-exempt bonds and the present value of aircraft operating lease obligations$4,775$5,350  
 --------------------  
 $17,535$19,700  
Less: Unrestricted cash and short-term investments$5,383$4,268  
 --------------------  
Net Debt$12,152$15,432  
 ==================  
     
     Note:  The Company believes the Net Debt metric assists investors in 
            understanding changes in the Company's liquidity and its progress 
            in building a financial foundation under the Company's Turnaround 
            Plan.    
     
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)
Estimate for American Airlines, Inc. Mainline Jet Operations  
 Estimate fo Year Ended
December 31,
  
 -------------------------------   
(in millions, except as noted)20072006  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates (cents)11.0810.90  
Less: Fuel expense per available seat mile3.423.32  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)7.667.58  
 ==================  
Percent Change1.1%   
     
Estimate for American Airlines, Inc. Mainline Jet Operations  
 Estimate for Three Months Ended June 30,   
 -------------------------------   
(in millions, except as noted)20072006  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates (cents)11.1010.88  
Less: Fuel expense per available seat mile3.483.47  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)7.627.41  
 ==================  
Percent change2.8%   
     
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)
Estimate for AMR Corporation    
 Estimate for Year Ended
December 31,
  
 -------------------------------   
(in millions, except as noted)20072006  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates (cents)11.6911.46  
Less: Fuel expense per available seat mile3.513.41  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)8.188.05  
 --------------------  
Percent Change1.6%   
     
Estimate for AMR Corporation    
 Estimate for Three Months Ended June 30,   
 -------------------------------   
(in millions, except as noted)20072006  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates (cents)11.6911.45  
Less: Fuel expense per available seat mile3.553.56  
 --------------------  
Operating expenses per available seat mile, excluding Regional Affiliates and fuel expense (cents)8.147.89  
 --------------------  
Percent change3.1%   

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, Corporate Communications of AMR Corporation,
+1-817-967-1577, or corp.comm@aa.com

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

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