Ratings of AMR Corp. and its principal operating subsidiary, American Airlines Inc., remain on CreditWatch with negative implications, where they were placed Sept. 13, 2001 (along with those of other U.S. airlines). The corporate credit ratings of each were downgraded to current levels Sept. 20, 2001. Ratings are supported by a solid competitive position, an eroded but still better-than-average balance sheet, and satisfactory financial flexibility in the form of cash, bank lines, and unsecured assets. These positives are more than offset by substantial financial damage and ongoing risks relating to the industrywide crisis since Sept. 11, 2001, and fairly high operating costs that could increase further with an upcoming pilot contract likely to be negotiated later in 2002. American, with
