Standard&Poor's Ratings Services' ratings on Fort Worth, Texas-based AMR Corp. and subsidiary American Airlines Inc. reflect participation in the competitive, cyclical, and capital-intensive airline industry; a heavy debt and pension burden; and substantial capital spending needs to modernize the airline's fleet. Satisfactory liquidity, with $4.6 billion of unrestricted cash and short-term investments at Dec. 31, 2007, and positive free cash flow, which is being applied to reduce debt, are positives. American Airlines is the world's largest airline, measured by traffic (though not revenues), with solid market shares in the U.S. domestic, trans-Atlantic, and Latin American markets, but a minimal presence in the Pacific. If other large U.S. airlines were to merge, several possible combinations would result in a
