American Airlines to Shed Regional Unit

DALLAS --

The parent of American Airlines said Wednesday it plans to sell or spin off its American Eagle regional airline next year. Its shares rose 8 percent.

Investors have been pressing AMR Corp. to sell the regional carrier and other assets, moves they believe could raise money and lift AMR's stock price.

Eagle operates regional jets that connect American Airlines hubs such as Dallas-Fort Worth with smaller cities.

Fort Worth-based AMR said in a statement that it is still studying whether to spin off Eagle to AMR shareholders, sell to a third party or divest the carrier in some other way. Although planned for 2008, the timing of the divestiture could be affected by the economic, industry and financial-market conditions, the company said.

AMR said divesting Eagle "is in the best interests of AMR and its shareholders." AMR said the move would also give Eagle the chance to win new business and provide new opportunities for its employees.

The disclosure sent AMR shares up $1.64, or 8 percent, to $22.20 in afternoon trading.