Solid to dominant positions in major markets served: domestic U.S., trans-Atlantic routes, Latin American routes; and Improved cost structure, as a result of substantial labor concessions. Participation in the price-competitive, cyclical, and high operating leverage U.S. passenger airline industry; Heavy losses incurred in 2001, 2002, and the first quarter of 2003, eroding financial strength; Heavy debt, lease, and unfunded retiree liability burden; Limited financial flexibility. The June 20, 2003, upgrade of AMR Corp. and subsidiary American Airlines Inc. was based on expected earnings and cash flow improvement as a result of the April 2003 agreement with labor groups on $1.8 billion of annual concessions over the next five years. AMR remains highly leveraged and vulnerable to any further airline industry
