The 'B-' corporate credit ratings on AMR Corp. and American Airlines Inc. reflect a weak financial profile following several years of huge losses, a heavy debt and pension burden, and participation in the competitive, cyclical, and capital-intensive airline industry. An improved cost structure and operating results following substantial labor concessions and good 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
