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. Adequate liquidity, with $2.9 billion of unrestricted cash at Dec. 31, 2004, is a modest positive. AMR's American Airlines Inc. subsidiary is the world's largest airline, measured by traffic, with solid market shares in the U.S. domestic, trans-Atlantic, and Latin American markets, but a minimal presence in the Pacific. American, like most other large U.S. airlines, has incurred heavy losses since late 2000 due to industrywide problems of terrorism, war, high fuel prices, and accelerating price competition in the domestic market
