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. Adequate near-term liquidity, with $4.4 billion of unrestricted cash and short-term investments forecast by the company for Sept. 30, 2008, and substantial market positions in the U.S. domestic, trans-Atlantic, and Latin American markets (though a minimal presence in the Pacific) are positives. The July 25, 2008, downgrade of AMR and American reflected expected heavy losses and negative operating cash flow caused by record high fuel prices. We also lowered ratings on most of American's enhanced equipment trust
