Ratings on AMR Corp. (B-/Stable/--) and its American Airlines Inc. (B-/Stable/--) subsidiary reflect a weak financial profile following several years of huge losses, heavy upcoming debt and pension obligations, and participation in the competitive, cyclical, and capital-intensive airline industry. An improved cost structure following substantial labor concessions and adequate near-term liquidity are positives. AMR's American Airlines Inc. subsidiary is the world's largest airline, with solid market shares in the U.S. domestic, trans-Atlantic, and Latin American markets, but a minimal presence in the Pacific. American, like other large U.S. airlines, has been under severe pressure since late 2000 due to industrywide problems, and faces continuing pressure as low-cost, low-fare competitors continue to expand, despite signs of gradually improving passenger demand since
