<$3.5> Billion for Terrible Year

As they say, "Consistent with expectations," AMR Corporation, the parent company of American Airlines, Inc., reported a fourth quarter net loss of $529 million, or $3.39 per share. This compares with last year's fourth quarter net loss of $734 million before special items, and $798 million -- $5.17 per share -- after special items.

For full year 2002, AMR reported a net loss of $2.0 billion before special items, and $3.5 billion -- $22.57 per share -- after special items. For 2001, the Company reported a net loss of $1.4 billion before special items, and $1.8 billion -- or $11.43 per share -- after special items. "Clearly, results such as the ones we reported today are unsustainable," said Don Carty, AMR's chairman and chief executive officer.

"While there are many factors that impacted our results during 2002, including a sluggish economy, high fuel prices, lingering concerns over terrorism and the possibility of a war in the Middle East, the core issue for our Company remains a cost structure that is out of step with the revenue environment facing domestic airlines. As we've been discussing with our employees, we believe that a permanent shift has occurred in the airline revenue environment which will require us to reduce our annual costs by at least four billion dollars."

Carty continued, "The people of American have made tremendous strides to reduce our operating costs by de-peaking our Chicago and Dallas/Ft. Worth hubs, simplifying our fleet, automating customer ticketing and check-in functions, as well as a host of other programs designed to reduce our long- term structural costs. These incredibly significant efforts have resulted in a permanent annual savings of two billion dollars. Nonetheless, we still have a very big challenge in front of us to achieve our four billion cost-reduction target."

FMI: www.amrcorp.com