AMR Corporation Reports Fourth Quarter 2008 Loss of $340 Million

Arpey added that American expects to enhance its global network in 2009 by achieving regulatory approval of its antitrust immunity application with fellow oneworld members, which will pave the way for American's planned joint business agreement with British Airways and Iberia and help oneworld compete more effectively with other global alliances. The Company also hopes to build on the beginning strides it made last year to improve dependability and the customer experience, Arpey said.

AMR today provided an update to the delivery schedule for the incoming 76 Boeing 737-800 aircraft that will replace MD-80 aircraft in American's fleet. As a result of Boeing delivery delays, the Company now expects to receive 29 737s in 2009 (compared to 36 expected previously), 39 in 2010 (compared to 40 expected previously) and eight in the first quarter of 2011. The first deliveries are expected near the end of the first quarter of 2009.

As a result of the uncertainty surrounding the economic climate, the Company has decided not to use MD-80s to backfill flying associated with the seven 737s that no longer will be delivered in 2009. Largely as a result of this decision, the Company's 2009 mainline capacity will decline by more than one percentage point compared to previous guidance provided in October. (Capacity expectations for 2009 are outlined in the Guidance section below.)

Financial and Operational Performance

American's mainline passenger revenue per available seat mile (unit revenue), excluding special items, increased by 5.5 percent in the fourth quarter of 2008 compared to the year-ago quarter.

Mainline capacity, or total available seat miles, in the fourth quarter decreased by 8.3 percent compared to the same period in 2007, as the Company continued to reduce capacity given economic conditions and still-challenging fuel prices.

American's mainline load factor - or the percentage of total seats filled - was 78.3 percent during the fourth quarter, its third-highest fourth quarter load factor ever, compared to a record 80.2 percent in the fourth quarter of 2007. American's fourth-quarter yield, which represents average fares paid, excluding special items, increased 8.1 percent compared to the fourth quarter of 2007, its 15th consecutive quarter of year-over-year yield increases.

AMR reported fourth quarter consolidated revenues of approximately $5.5 billion, a decrease of 3.1 percent from the same period in 2007 (which excludes special items from 2007), as consolidated passenger revenue declined 3.9 percent year over year on less capacity and traffic, and cargo revenue declined 13.9 percent largely due to the economy.

Other revenues, including sales from such sources as confirmed flight changes, purchased upgrades, Buy-on-Board food services, and bag fees, increased 9.7 percent year over year to $545 million in the fourth quarter, compared to the fourth quarter of 2007.

AMR reported full-year 2008 revenues of approximately $23.8 billion, an increase of 3.8 percent compared to 2007 (which excludes special items from 2007).

American's mainline cost per available seat mile (unit cost) in the fourth quarter, excluding special items, increased 6.8 percent year over year. Excluding fuel and special items, mainline unit costs in the fourth quarter increased by 6.8 percent year over year. The fourth quarter increase in mainline unit costs was driven by costs related to the Company's capacity reductions in late 2008, as well as higher material and repair costs, and foreign exchange expense.

Balance Sheet Update

AMR continued to focus on strengthening its balance sheet in the fourth quarter.