AMR Corp. (BB-/Negative/-) today announced a reorganization of operations at its subsidiary American Airlines Inc. (BB-/Negative/-) that will include headcount reductions, grounding of additional aircraft, capacity reductions, and an overhaul of its hub network operations. Standard&Poor's Ratings Services said its ratings and outlooks for both entities are not affected by the reorganization. The company anticipates that the changes, which focus on maximizing efficiency rather than revenues, will aid its profitability (it lost $1.1 billion in the first six months of 2002). This new strategy is expected to result in reduced costs that will allow it to compete more effectively against low-cost, low-fare carriers. These carriers' profitability has been impacted to a much lesser extent than those of the
