UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM 10-Q



[X]Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2004.


[ ]Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period From      to    .


Commission file number 1-2691.



                    American Airlines, Inc.
     (Exact name of registrant as specified in its charter)

        Delaware                            13-1502798
    (State or other                      (I.R.S. Employer
      jurisdiction                      Identification No.)
   of incorporation or
     organization)

 4333 Amon Carter Blvd.
   Fort Worth, Texas                           76155
 (Address of principal                      (Zip Code)
   executive offices)

Registrant's telephone number, including area code (817) 963-1234


                         Not Applicable
(Former name, former address and former fiscal year , if changed
                       since last report)


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes X    No        .

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Exchange Act Rule 12b-2). Yes     No X   .

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.


Common Stock, $1 par value - 1,000 shares as of July 16, 2004.

The registrant meets the conditions set forth in, and is filing
this form with the reduced disclosure format prescribed by,
General Instructions H(1)(a) and (b) of Form 10-Q.


                                 INDEX

                        AMERICAN AIRLINES, INC.




PART I:   FINANCIAL INFORMATION


Item 1.  Financial Statements

  Consolidated Statements of Operations -- Three and six months ended
  June 30, 2004 and 2003

  Condensed Consolidated Balance Sheets -- June 30, 2004 and December 31,
  2003

  Condensed Consolidated Statements of Cash Flows -- Six months ended
  June 30, 2004 and 2003

  Notes  to  Condensed Consolidated Financial Statements -- June  30,
  2004

Item 2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Item 4.  Controls and Procedures


PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURE
                    PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements

AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In millions)
<Table>
<Caption>

                                  Three Months Ended        Six Months Ended
                                      June 30,                  June 30,
                                   2004        2003         2004        2003

                              <c>          <c>         <c>          <c>
Revenues
    Passenger                    $ 3,895      $ 3,544      $7,573      $ 6,938
    Regional Affiliates              505          387         925          713
    Cargo                            155          140         303          274
    Other revenues                   266          245         523          499
      Total operating revenues     4,821        4,316       9,324        8,424

Expenses
  Wages, salaries and benefits     1,580        1,761       3,101        3,750
  Aircraft fuel                      848          604       1,596        1,286
  Regional payments                  454          388         887          759
  Commissions, booking fees and
   credit card expense               287          261         574          515
  Depreciation and amortization      278          301         563          598
  Other rentals and landing fees     270          275         545          543
  Maintenance, materials and repairs 210          150         406          345
  Aircraft rentals                   148          172         296          356
  Food service                       138          150         274          298
  Other operating expenses           516          509       1,015        1,107
  Special charges                    (31)          76         (31)         101
  U. S. government grant               -         (315)          -         (315)
    Total operating expenses       4,698        4,332       9,226        9,343

Operating Income (Loss)              123          (16)         98         (919)

Other Income (Expense)
  Interest income                     13            8          27           21
  Interest expense                  (162)        (147)       (322)        (296)
  Interest capitalized                19           17          36           35
  Related party interest - net         -            2           -            5
  Miscellaneous - net                 (6)           3         (34)         (11)
                                    (136)        (117)       (293)        (246)

Loss Before Income Taxes             (13)        (133)       (195)      (1,165)
Income tax benefit                     -            -           -            -
Net Loss                         $   (13)       $(133)     $ (195)     $(1,165)
</Table>



The accompanying notes are an integral part of these financial statements.

                                         -1-

AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In millions)
<Table>
<Caption>

                                                June 30,       December 31,
                                                  2004             2003

                                            <c>             <c>
Assets
Current Assets
  Cash                                         $   194         $   118
  Short-term investments                         3,151           2,474
  Restricted cash and short-term investments       489             527
  Receivables, net                                 910             760
  Inventories, net                                 464             475
  Other current assets                             229             232
    Total current assets                         5,437           4,586

Equipment and Property
  Flight equipment, net                         12,514          12,803
  Other equipment and property, net              2,323           2,344
  Purchase deposits for flight equipment           277             277
                                                15,114          15,424

Equipment and Property Under Capital Leases
  Flight equipment, net                          1,212           1,279
  Other equipment and property, net                 81              86
                                                 1,293           1,365

Route acquisition costs and airport operating
 and gate lease rights, net                      1,207           1,221
Other assets                                     3,824           3,875
                                               $26,875         $26,471
Liabilities and Stockholder's Equity
Current Liabilities
  Accounts payable                             $ 1,072         $   910
  Accrued liabilities                            1,818           1,840
  Air traffic liability                          3,376           2,799
  Payable to affiliates, net                       238             153
  Current maturities of long-term debt             464             465
  Current obligations under capital leases         145             170
    Total current liabilities                    7,113           6,337

Long-term debt, less current maturities          9,058           9,073
Obligations under capital leases, less
 current obligations                             1,090           1,156
Pension and postretirement benefits              4,604           4,803
Other liabilities, deferred gains and
 deferred credits                                4,589           4,757

Stockholder's Equity
  Common stock                                       -               -
  Additional paid-in capital                     3,312           3,023
  Accumulated other comprehensive loss            (911)           (893)
  Retained deficit                              (1,980)         (1,785)
                                                   421             345
                                               $26,875         $26,471
</Table>
The accompanying notes are an integral part of these financial statements.

                                    -2-

AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In millions)
<Table>
<Caption>
                                                     Six Months Ended June 30,
                                                       2004             2003

                                                   <c>             <c>
Net Cash Provided (Used) by Operating Activities      $  577          $   (69)

Cash Flow from Investing Activities:
  Capital expenditures, including purchase
   deposits for flight equipment                        (153)            (173)
  Net (increase) decrease in short-term investments     (677)             172
  Net decrease in restricted cash and short-term
   investments                                            38              233
  Proceeds from sale of equipment and property            26               33
  Proceeds from sale of interest in Worldspan              -              180
  Other                                                   (9)              24
    Net cash (used) provided by investing activities    (775)             469

Cash Flow from Financing Activities:
  Payments on long-term debt and capital lease
   obligations                                          (287)            (466)
  Proceeds from issuance of long-term debt               180                -
  Funds transferred from affiliates, net                 381              121
    Net cash provided (used) by financing activities     274             (345)

Net increase in cash                                      76               55
Cash at beginning of period                              118              100

Cash at end of period                                 $  194          $   155



Activities Not Affecting Cash

Flight equipment acquired through seller financing    $    -          $   458
Capital lease obligations incurred                    $   10          $   131
Reductions to capital lease obligations
 due to lease modifications                           $    -          $  (127)

</Table>














The  accompanying notes are an integral part of these financial statements.


                                     -3-

AMERICAN AIRLINES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.The   accompanying   unaudited  condensed   consolidated   financial
  statements have been prepared in accordance with generally  accepted
  accounting  principles for interim financial  information  and  with
  the  instructions  to Form 10-Q and Article 10  of  Regulation  S-X.
  Accordingly,  they  do  not  include  all  of  the  information  and
  footnotes  required by generally accepted accounting principles  for
  complete financial statements.  In the opinion of management,  these
  financial  statements contain all adjustments, consisting of  normal
  recurring accruals unless otherwise disclosed, necessary to  present
  fairly the financial position, results of operations and cash  flows
  for  the  periods indicated. Results of operations for  the  periods
  presented  herein  are  not  necessarily indicative  of  results  of
  operations  for  the entire year. American Airlines, Inc.  (American
  or  the  Company)  is a wholly owned subsidiary of  AMR  Corporation
  (AMR).  For further information, refer to the consolidated financial
  statements  and  footnotes thereto included in the  American  Annual
  Report on Form 10-K for the year ended December 31, 2003 (2003  Form
  10-K).   Certain amounts have been reclassified to conform with  the
  2004 presentation.

2.The  Company  accounts  for its participation in  AMR's  stock-based
  compensation  plans in accordance with Accounting  Principles  Board
  Opinion No. 25, "Accounting for Stock Issued to Employees" (APB  25)
  and  related Interpretations.  Under APB 25, no compensation expense
  is  recognized for stock option grants if the exercise price of  the
  stock  option  grants is at or above the fair market  value  of  the
  underlying stock on the date of grant.  The Company has adopted  the
  pro  forma  disclosure features of Statement of Financial Accounting
  Standards  No. 123, "Accounting for Stock-Based Compensation"  (SFAS
  123), as amended by Statement of Financial Accounting Standards  No.
  148,   "Accounting   for  Stock-Based  Compensation-Transition   and
  Disclosure."   The  following table illustrates the  effect  on  net
  loss   if  the  Company  had  applied  the  fair  value  recognition
  provisions  of  SFAS  123 to stock-based employee  compensation  (in
  millions):
<Table>
<Caption>
                                    Three Months Ended    Six Months Ended
                                         June 30,             June 30,
                                     2004       2003       2004       2003
  
                              <c>        <c>        <c>        <c>
Net loss, as reported              $(13)      $(133)     $(195)     $(1,165)
Add: Stock-based employee
   compensation expense included
   in reported net loss               5           8         16            5
Deduct: Total stock-based
  employee compensation expense
  determined under fair value
  based methods for all awards      (22)        (23)       (49)         (30)
Pro forma net loss                 $(30)      $(148)     $(228)     $(1,190)
</Table>
3.As  of June 30, 2004, the Company had commitments to acquire  an
  aggregate of 47 Boeing 737-800s and nine Boeing 777-200ERs  in  2006
  through  2010.  Future  payments for  all  aircraft,  including  the
  estimated amounts for price escalation, will approximate $106 million
  in 2005, $654 million in 2006 and an aggregate of approximately $2.0
  billion in 2007 through 2010.

  The  Company  is subject to environmental issues at various  airport
  and  non-airport  locations for which it  has  accrued,  in  Accrued
  liabilities  on  the  accompanying  condensed  consolidated  balance
  sheets,  $73  million and $72 million at June 30, 2004 and  December
  31,  2003,  respectively. Management believes, after  considering  a
  number   of  factors,  that  the  ultimate  disposition   of   these
  environmental  issues  is  not expected  to  materially  affect  the
  Company's consolidated financial position, results of operations  or
  cash flows.  Amounts recorded for environmental issues are based  on
  the  Company's  current  assessments of the  ultimate  outcome  and,
  accordingly,  could  increase  or  decrease  as  these   assessments
  change.

                                 -4-

AMERICAN AIRLINES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)

  In  2003, the Company reached concessionary agreements with  certain
  lessors.   Certain  of these agreements provide that  the  Company's
  obligations  under the related leases revert to the  original  terms
  if  certain events occur prior to December 31, 2005, including:  (i)
  an  event of default under the related lease (which generally occurs
  only  if  a  payment  default occurs), (ii) an event  of  loss  with
  respect  to the related aircraft, (iii) rejection by the Company  of
  the  lease under the provisions of Chapter 11 of the U.S. Bankruptcy
  Code or (iv) the Company's filing for bankruptcy under Chapter 7  of
  the  U.S.  Bankruptcy  Code.  If any one of  these  events  were  to
  occur,  the  Company  would  be responsible  for  approximately  $64
  million  in  additional operating lease payments and $65 million  in
  additional payments related to capital leases as of June  30,  2004.
  This   amount  will  increase  to  approximately  $119  million   in
  operating  lease  payments and $111 million in payments  related  to
  capital  leases prior to the expiration of the provision on December
  31,  2005.  These  amounts  are being accounted  for  as  contingent
  rentals and will only be recognized if they become payable.

  Financial   Accounting  Standards  Board  Interpretation   No.   45,
  "Guarantor's Accounting and Disclosure Requirements for  Guarantees,
  Including   Indirect   Guarantees   of   Indebtedness   of   Others"
  (Interpretation  45),  requires disclosures in  interim  and  annual
  financial  statements  about obligations  under  certain  guarantees
  issued  by  the  Company. The disclosures required by Interpretation
  45  were  included in Notes 4, 5 and 6 to the consolidated financial
  statements  in  the 2003 Form 10-K. There have been  no  significant
  changes  to such disclosures except as disclosed in Note 6  in  this
  Form 10-Q.

4.Accumulated  depreciation of owned equipment and  property  at  June
  30,  2004  and December 31, 2003 was $8.2 billion and $7.8  billion,
  respectively.   Accumulated amortization of equipment  and  property
  under  capital  leases at June 30, 2004 and December  31,  2003  was
  $1.1 billion.

5.As  discussed in Note 8 to the consolidated financial statements  in
  the  2003  Form 10-K, the Company has a valuation allowance  against
  the  full  amount  of  its  net deferred tax  asset.  The  Company's
  deferred tax asset valuation allowance increased $72 million  during
  the  six  months ended June 30, 2004 to $1.1 billion as of June  30,
  2004.

6.In February 2004, American issued $180 million of Fixed Rate
  Secured Notes due 2009, which bear interest at 7.25 percent.  As of
  June 30, 2004, these notes are secured by certain spare parts (with
  a net book value of $219 million), and by $37 million in cash
  collateral (classified as Other assets on the accompanying condensed
  consolidated financial statements).

  Also  in February 2004, AMR issued $324 million principal amount  of
  4.50  percent  senior convertible notes due 2024 (the  4.50  Notes).
  Each  note is convertible into AMR common stock at a conversion rate
  of  45.3515  shares  per  $1,000 principal amount  of  notes  (which
  represents  an  equivalent conversion price of  $22.05  per  share),
  subject   to  adjustment  in  certain  instances.  The   notes   are
  convertible  under  certain  circumstances,  including  if  (i)  the
  closing  sale  price of AMR's common stock reaches a  certain  level
  for  a specified period of time, (ii) the trading price of the notes
  as  a  percentage  of the closing sale price of AMR's  common  stock
  falls  below  a certain level for a specified period of time,  (iii)
  AMR  calls  the  notes  for redemption, or  (iv)  certain  corporate
  transactions  occur.  Holders  of  the  notes  may  require  AMR  to
  repurchase  all  or any portion of the notes on February  15,  2009,
  2014  and 2019 at a purchase price equal to the principal amount  of
  the  notes being purchased plus accrued and unpaid interest  to  the
  date  of  purchase. AMR may pay the purchase price in  cash,  common
  stock  or  a  combination of cash and common stock.  After  February
  15,  2009, AMR may redeem all or any portion of the notes  for  cash
  at  a  price  equal  to  the principal amount  of  the  notes  being
  redeemed  plus  accrued and unpaid interest  as  of  the  redemption
  date.  These  notes are guaranteed by American.  In  February  2004,
  AMR  transferred  $315 million in proceeds from the  4.50  Notes  to
  American.  If  the holders of the 4.50 Notes or AMR's  4.25  percent
  senior  convertible notes due 2023 (the 4.25 Notes) require  AMR  to
  repurchase all or any portion of the notes on the repurchase  dates,
  it is AMR's present intention to satisfy the requirement in cash.


                                -5-
AMERICAN AIRLINES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)

  As   of   June   30,  2004,  AMR  has  issued  guarantees   covering
  approximately  $932 million of American's tax-exempt bond  debt  and
  American  has issued guarantees covering approximately $1.3  billion
  of  AMR's unsecured debt.  In addition, as of June 30, 2004, AMR and
  American have issued guarantees covering approximately $484  million
  of AMR Eagle's secured debt.

7.The following tables provide the components of net periodic
  benefit cost for the three and six months ended June 30, 2004 and 2003
  (in millions):
<Table>
<Caption>
                                              Pension Benefits
                                   Three Months Ended     Six Months Ended
                                        June 30,              June 30,
                                  2004         2003        2004         2003
   
                          <c>           <c>          <c>         <c>
  Components  of  net  periodic
   benefit cost

   Service cost                 $   90        $  90       $  179      $  199
   Interest cost                   141          141          283         293
   Expected return on assets      (142)        (118)        (284)       (236)
   Amortization of:
    Prior service cost               3            4            7          11
    Unrecognized net loss           15           26           29          58
   Curtailment loss *                -           46            -          46

   Net periodic benefit cost    $  107        $ 189       $  214      $  371
</Table>

   *  Included in Special charges in the consolidated statement of operations.
<Table>
<Caption>
                                        Other Postretirement Benefits
                                   Three Months Ended      Six Months Ended
                                       June 30,                June 30,
                                  2004         2003        2004         2003
   
                          <c>           <c>          <c>           <c>
  Components  of  net  periodic
   benefit cost

   Service cost                 $   19        $  21       $   38       $  45
   Interest cost                    50           54          101         110
   Expected return on assets        (3)          (3)          (6)         (5)
   Amortization of:
    Prior service cost              (2)          (2)          (5)         (4)
    Unrecognized net loss            2            5            4          10

   Net periodic benefit cost    $   66        $  75       $  132       $ 156
</Table>

  As  of  June 30, 2004, the Company had contributed the entire  $461
  million  minimum  amount it expects to contribute  to  its  defined
  benefit pension plans in 2004. The Company expects to contribute  a
  minimum  of  $450 million to its defined benefit pension  plans  in
  2005.  The Company's estimates of its defined benefit pension  plan
  contributions reflect the provisions of the Pension Funding  Equity
  Act of 2004, which was enacted in April 2004.


                                      -6-

AMERICAN AIRLINES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)

  In  December  2003, the President signed the Medicare  Prescription
  Drug,  Improvement and Modernization Act of 2003 (the Modernization
  Act),  which introduced a prescription drug benefit under  Medicare
  into law. In January 2004, the Financial Accounting Standards Board
  (FASB)  issued a FASB Staff Position, which permitted companies  to
  elect to defer accounting for the effects of the Modernization Act.
  The  Company did not elect this deferral and recognized the  effect
  of  the  Modernization Act in the calculation of its postretirement
  benefit  liability as of December 31, 2003. In May 2004,  the  FASB
  issued  a FASB Staff Position with final authoritative guidance  on
  accounting  for  the  Modernization Act. This  final  authoritative
  guidance  had  no  impact  on  the  Company's  accounting  for  the
  Modernization Act.

  The  effect of the Modernization Act was (i) to reduce the Company's
  accumulated postretirement benefit obligation (APBO) as of  December
  31,  2003  by $415 million by decreasing unrecognized net  actuarial
  losses   and  (ii)  to  decrease  the  Company's  full   year   2004
  postretirement  benefits expense by approximately $60  million.  The
  decrease  in  the  Company's  APBO is due  to  a  reduction  in  the
  expected  per  capita  claims cost along with  a  reduction  in  the
  expected rates of participation in the plan and is reflected in  the
  Company's  2004 postretirement benefits expense through amortization
  of   unrecognized  gains/losses.   Additionally,  the  service   and
  interest  cost  components  of  the  Company's  2004  postretirement
  benefits  expense have been reduced as a result of the Modernization
  Act.

8.During  the  last few years, as a result of the events of  September
  11,  2001  and the Company's restructuring activities,  the  Company
  has  recorded  a  number of special charges. During the  six  months
  ended June 30, 2004 and 2003, the Company recorded the following  to
  Special charges:
                                                    Amount
               Description of Charge              (millions)

   2004

   Aircraft charges

   Adjusted prior accruals for lease return and
   other costs initially recorded as a component
   of Special charges due to lower than
   anticipated lease return costs                   $ (20)

   Employee charges

   Adjusted prior accruals for severance costs
   related to the 2003 Management Reductions and
   Labor Agreements* due to fewer furloughs than
   anticipated resulting from the Company's
   operational requirements and the volume of
   pilot retirements                                $ (11)

   2003

   Aircraft charges

   Adjusted prior accruals for lease return and
   other costs initially recorded as a component
   of Special charges                               $ (20)

                                 -7-

AMERICAN AIRLINES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)

                                                    Amount
               Description of Charge              (millions)

   2003 (continued)

   Employee charges

   Reduced approximately 8,000 jobs across all
   work groups in conjunction with the Management
   Reductions and the Labor Agreements.  Accrued
   primarily severance costs.                       $  60

   Recognized curtailment loss**                       46

   Accrued severance charges related to the 2002
   workforce reduction                                 25

   Reduced vacation accrual to reflect new lower
   pay scales and maximum vacation caps and wrote-
   off a note receivable from one of the Ccompany's
   three major unions in conjunction with the Labor
   Agreements and the Management Reductions           (59)
                                                    $  72
   Facility exit costs

   Accrued the fair value of future lease
   commitments and wrote-off certain prepaid
   rental amounts and leasehold improvements
   related to certain excess airport space          $  45

   Other                                                4
                                                    $  49

  *In  February  2003, American asked its  employees  for
   approximately  $1.8  billion in annual  savings   through   a
   combination of changes in wages, benefits and work rules.   In
   April  2003, American reached agreements with its three  major
   unions  (the  Labor  Agreements) and also implemented  various
   reductions  in  the  pay plans and benefits for  non-unionized
   personnel,  including  officers  and  other  management   (the
   Management Reductions).

  **As  result  of workforce reductions related  to  the  Labor
   Agreements  and Management Reductions, the Company  recognized
   a  curtailment  loss  of $46 million related  to  its  defined
   benefit  pension  plans,  in  accordance  with  Statement   of
   Financial  Accounting Standards No. 88, "Employers' Accounting
   for  Settlements  and Curtailments of Defined Benefit  Pension
   Plans and for Termination Benefits" (SFAS 88).

  The   following  table  summarizes  the  changes  in  the  remaining
  accruals for special charges (in millions):
<Table>
<Caption>
                            Aircraft  Facility    Employee
                            Charges  Exit Costs   Charges   Total
      
                   <c>        <c>        <c>         <c>
     Remaining accrual
      at December 31, 2003  $ 194      $  56      $  26     $ 276
     Adjustments              (20)         -        (11)      (31)
     Payments                 (42)        (4)        (8)      (54)
     Remaining accrual
      at June 30, 2004      $ 132      $  52      $   7     $ 191
</Table>
  Cash  outlays  related to the accruals, as of June  30,  2004,  for
  aircraft  charges,  facility exit costs and employee  charges  will
  occur through 2014, 2018 and 2004, respectively.

                                  -8-

AMERICAN AIRLINES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)

  In   April  2003,  the  President  signed  the  Emergency   Wartime
  Supplemental  Appropriations Act, 2003  (the  Appropriations  Act),
  which  included provisions authorizing payment of $2.3  billion  to
  reimburse  air carriers for increased security costs in  proportion
  to  the amounts each carrier had paid in passenger security and air
  carrier security fees to the Transportation Security Administration
  (the  Security  Fee  Reimbursement).  The  Company's  Security  Fee
  Reimbursement  was $315 million (net of payments to American  Eagle
  Airlines,  Inc., Executive Airlines, Inc. and independent  regional
  affiliates)  and  is  included  in U.S.  government  grant  in  the
  accompanying consolidated statement of operations.

9.The  Company  includes  changes in the  fair  value  of  certain
  derivative financial instruments that qualify for hedge accounting,
  changes  in  minimum pension liabilities and unrealized  gains  and
  losses  on available-for-sale securities in comprehensive loss.  In
  the second quarter of 2003, as a result of the Labor Agreements and
  Management  Reductions discussed in Note 8 in this Form  10-Q,  the
  Company  remeasured its defined benefit plans. In conjunction  with
  the  remeasurement the Company recorded an increase in its  minimum
  pension  liability,  which  resulted in  an  additional  charge  to
  stockholder's equity as a component of other comprehensive loss  of
  $334 million.

  For  the  three  months ended June 30, 2004 and 2003, comprehensive
  loss  was $14 million and $475 million, respectively, and  for  the
  six  months  ended June 30, 2004 and 2003, comprehensive  loss  was
  $213 million and $1.5 billion, respectively. The difference between
  net  loss and comprehensive loss for the six months ended June  30,
  2004   is  due  primarily  to  the  accounting  for  the  Company's
  derivative financial instruments. The difference between  net  loss
  and  comprehensive loss for the three and six months ended June 30,
  2003  is  due primarily to the adjustment to the Company's  minimum
  pension liability.

10.American  classifies  certain  receivables  from  its  parent   and
  affiliates  against Additional paid-in-capital.  In  February  2004,
  AMR  transferred  the  proceeds from the  4.50  Notes  to  American,
  reducing  American's  receivable  from  AMR  by  approximately  $315
  million.  As of June 30, 2004, the Company classified a $95  million
  receivable  from  its parent against Additional  paid-in-capital  on
  the    accompanying    condensed   consolidated    balance    sheet.
  Comparatively,  as  of December 31, 2003, the Company  classified  a
  $383  million receivable from its parent against Additional paid-in-
  capital on the accompanying condensed consolidated balance sheet.














                                 -9-



Item  2.   Management's Discussion and Analysis of Financial Condition
and Results of Operations

Forward-Looking Information

Statements  in this report contain various forward-looking  statements
within  the meaning of Section 27A of the Securities Act of  1933,  as
amended,  and Section 21E of the Securities Exchange Act of  1934,  as
amended,  which  represent  the  Company's  expectations  or   beliefs
concerning future events.  When used in this document and in documents
incorporated  herein  by  reference,  the  words  "expects,"  "plans,"
"anticipates,"  "believes," and similar expressions  are  intended  to
identify   forward-looking   statements.  Forward-looking   statements
include,  without  limitation, the Company's  expectations  concerning
operations  and financial conditions, including changes  in  capacity,
revenues,   and  costs,  future  financing  needs,  overall   economic
conditions, plans and objectives for future operations, and the impact
on  the  Company of its results of operations in recent years and  the
sufficiency  of its financial resources to absorb that  impact.  Other
forward-looking  statements include statements  which  do  not  relate
solely  to  historical facts, such as, without limitation,  statements
which  discuss the possible future effects of current known trends  or
uncertainties,  or  which indicate that the future  effects  of  known
trends  or  uncertainties cannot be predicted, guaranteed or  assured.
All   forward-looking  statements  in  this  report  are  based   upon
information  available to the Company on the date of this report.  The
Company  undertakes  no obligation to publicly update  or  revise  any
forward-looking  statement, whether as a result  of  new  information,
future events, or otherwise.

Forward-looking  statements are subject to a number  of  risk  factors
that  could  cause  actual  results  to  differ  materially  from  our
expectations.  The  following factors, in addition to  other  possible
factors not listed, could cause the Company's actual results to differ
materially from those expressed in forward-looking statements: changes
in   economic,  business  and  financial  conditions;  the   Company's
substantial   indebtedness;  continued  high  fuel  prices   and   the
availability  of  fuel;  the residual effects  of  the  war  in  Iraq;
conflicts  in  the  Middle East or elsewhere; the  highly  competitive
business environment faced by the Company, with increasing competition
from  low cost carriers and historically low fare levels (which  could
result in a deterioration in the revenue environment); the ability  of
the  Company to implement its restructuring program and the effect  of
the   program   on   operational  performance  and   service   levels;
uncertainties with respect to the Company's international  operations;
changes in the Company's business strategy; actions by U.S. or foreign
government  agencies; the possible occurrence of additional  terrorist
attacks;  another  outbreak of a disease (such as SARS)  that  affects
travel   behavior;  uncertainties  with  respect  to   the   Company's
relationships  with  unionized and other  employee  work  groups;  the
inability  of  the  Company  to satisfy existing  financial  or  other
covenants  in  certain of its credit agreements; the  availability  of
future   financing;  and  increased  insurance  costs  and   potential
reductions  of  available insurance coverage.  Additional  information
concerning  these  and  other factors is contained  in  the  Company's
Securities and Exchange Commission filings, including but not  limited
to the 2003 Form 10-K.

Overview

American  ended  the quarter with $3.3 billion of cash and  short-term
investments  (and  an additional $489 million in restricted  cash  and
short-term  investments).   As of the date  of  this  Form  10-Q,  the
Company  believes it has sufficient liquidity to fund  its  operations
for  the  foreseeable future.  Nevertheless, American remains  heavily
indebted  and has significant obligations due in 2005 and  thereafter,
as  described  more fully under Item 7, "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations" in the 2003
Form  10-K.  Also see the discussion of the Company's credit  facility
covenants on page 11 of this Form 10-Q.

American's operating income and net loss improved during the three and
the  six  months ended June 30, 2004 compared to the same  periods  in
2003.   The  improvement  in  the  second  quarter  operating  results
occurred  despite  the  receipt of a U.S.  government  grant  of  $315
million in the second quarter of 2003 (as discussed in Note 8  to  the
accompanying condensed consolidated financial statements).
<Table>
<Caption>
(in millions)              Three Months Ended        Six Months Ended
                                 June 30,                June 30,
                         2004      2003   Change   2004    2003     Change

                     <c>      <c>      <c>     <c>     <c>       <c>
Operating Income (Loss) $ 123    $ (16)   $ 139   $  98   $  (919)  $1,017
Net Loss                $ (13)   $(133)   $ 120   $(195)  $(1,165)  $  970

                               -10-

</Table>
The  year-over-year  improvement in the Company's  operating  results
reflects  the  benefit  of  the  cost reduction  initiatives  in  the
Company's restructuring program, which is described more fully  under
Item  7, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the 2003 Form 10-K.  As a result of its
restructuring efforts, American's unit costs are currently among  the
lowest of the traditional hub and spoke carriers.

Although  the  Company has made significant progress in  restructuring
its  operations,  external factors continue to  create  a  challenging
financial environment for the Company and the U.S. airline industry in
general.   The   Company's  operating  and   financial   results   are
significantly  affected  by the price and availability  of  jet  fuel.
Persistent fuel price increases resulted in a year-over-year  increase
of  28.2  cents per gallon for American's mainline operations for  the
second  quarter. This price increase negatively impacted fuel  expense
by $215 million during the quarter, based on mainline fuel consumption
of  762  million  gallons.  Continuing high  fuel  prices,  additional
increases in the price of fuel, or limits in the supply of fuel, would
further adversely affect the Company's financial condition and results
of operations.

Mainline  unit revenues (passenger revenues per available  seat  mile)
improved  1.3 percent during the second quarter of 2004 due to  a  1.3
point  increase in American's load factor compared to the same  period
in  2003.   However, passenger yield (passenger revenue per  passenger
mile)  remained depressed relative to historical measures  because  of
the  Company's  reduced pricing power, resulting mainly  from  greater
cost  sensitivity  on  the  part  of  travelers,  especially  business
travelers,  and  intensifying competition arising  in  part  from  the
growth  of  low-cost  carriers  and  in  part  from  the  effects   of
significant increases in overall industry capacity in 2004.

The  Company needs improvement in the revenue environment,  additional
cost  reductions and further productivity improvements before  it  can
return  to sustained profitability at acceptable levels.  In addition,
the  Company's  ability  to  return  to  sustained  profitability   at
acceptable  levels will depend on a number of risk  factors,  many  of
which  are  largely beyond the Company's control.  Some  of  the  risk
factors  that  have  had  and/or may have a  negative  impact  on  the
Company's  business  and  financial  results  are  referred  to  under
"Forward-Looking  Information" above and are  discussed  in  the  Risk
Factors  listed in Item 7 (on pages 36-38) in the 2003 Form 10-K.   In
particular,  if  the  revenue environment deteriorates  beyond  normal
seasonal trends, fuel prices remain at historically high levels for an
extended period of time or the Company is unable to access the capital
markets  to  raise additional capital, it may be unable  to  fund  its
obligations and sustain its operations in the long-term.

LIQUIDITY AND CAPITAL RESOURCES

Credit Facility Covenants

American  has a fully drawn $834 million bank credit facility  secured
by aircraft that expires December 15, 2005, which contains a liquidity
covenant  and an EBITDAR (generally, earnings before interest,  taxes,
depreciation, amortization and rentals, adjusted for certain  non-cash
items) to fixed charges (generally, interest and total rentals)  ratio
covenant  (the  EBITDAR  Covenant). The  liquidity  covenant  requires
American  to  maintain a minimum level of $1.0 billion of unrestricted
cash  and short-term investments (the Liquidity Covenant). The Company
was  in  compliance with the Liquidity Covenant at June 30,  2004  and
expects to continue to comply with this covenant. The required EBITDAR
to  fixed charges ratio was 1.2 to 1.0 for the six-month period ending
June  30, 2004, and increases to 1.3 to 1.0 for the nine-month  period
ending  September 30, 2004, to 1.4 to 1.0 for the twelve-month  period
ending  December 31, 2004 and to 1.5 to 1.0 for each four  consecutive
quarters ending after December 31, 2004. The Company was in compliance
with  the  EBITDAR Covenant as of June 30, 2004 and expects to  comply
with  this covenant as of September 30, 2004. Continuation of  current
high  fuel  prices  and/or, to a lesser degree, deterioration  in  the
revenue  environment  could adversely affect the  Company's  continued
compliance  with this covenant for periods ending after September  30,
2004.  As  a  result, there are no assurances that  the  Company  will
continue  to  be  able  to  comply  with  this  covenant  through  the
expiration  of  the facility. Failure to comply with either  of  these
covenants would result in a default under this facility and - - if the
Company  did not take steps to cure, obtain a waiver of, or  otherwise
mitigate the default - - could result in a default under a significant
amount of the Company's other debt.


                               -11-


Significant Indebtedness and Future Financing

During  2001,  2002  and  2003, the Company  raised  an  aggregate  of
approximately  $8.4  billion  of  financing  mostly  to  fund  capital
commitments (mainly for aircraft and ground properties) and  operating
losses. During the six months ended June 30, 2004, the Company  raised
an  additional  $180 million of financing to fund capital  commitments
and  for  general corporate purposes, and ended the period  with  $3.3
billion of unrestricted cash and short-term investments compared  with
$2.6  billion at December 31, 2003. As of the date of this Form  10-Q,
the  Company  believes that it has sufficient liquidity  to  fund  its
operations  for the foreseeable future, including capital expenditures
and  other  contractual obligations.  However, to maintain  sufficient
liquidity  over  the  long-term as the  Company  seeks  to  return  to
sustained  profitability at acceptable levels, the Company  will  need
continued access to additional funding. The Company's possible  future
financing sources include: (i) a limited amount of additional  secured
aircraft  debt  (virtually all of the Company's Section  1110-eligible
aircraft  are  encumbered), (ii) debt secured by other  assets,  (iii)
securitization  of  future  operating  receipts,  (iv)  sale-leaseback
transactions of owned aircraft and (v) the potential sale  of  certain
non-core  assets.  However,  the  availability  and  level  of   these
financing  sources cannot be assured, particularly in  light  of  high
fuel  prices, historically weak revenues and the fact that the Company
has  far  fewer unencumbered assets available than it has had  in  the
past.

The  Company's  significant indebtedness could have  important  future
consequences,  such as (i) limiting the Company's  ability  to  obtain
additional   financing  for  working  capital,  capital  expenditures,
acquisitions  and  general  corporate  purposes,  (ii)  requiring  the
Company  to  dedicate  a substantial portion of  its  cash  flow  from
operations  to payments on its indebtedness, (iii) making the  Company
more  vulnerable to economic downturns, (iv) limiting its  ability  to
withstand  competitive  pressures  and  reducing  its  flexibility  in
responding  to  changing  business and economic  conditions,  and  (v)
limiting  the  Company's flexibility in planning for, or reacting  to,
changes in its business and the industry in which it operates.

Financing Activity

In  February 2004, American issued $180 million of Fixed Rate  Secured
Notes  due  2009.  These notes are secured by certain spare parts  and
cash collateral and bear interest at 7.25 percent.

In  addition,  in  February  2004, AMR  transferred  $315  million  in
proceeds from the 4.50 Notes to American.

See  Note  6  to  the  accompanying condensed  consolidated  financial
statements for additional information regarding debt guarantees.

Other Operating and Investing Activities

The Company's cost savings initiatives resulted in improved cash flow
from  operations during the six months ended June 30, 2004,  compared
to the same period in 2003. Net cash provided by operating activities
in  the  six-month  period ended June 30, 2004 was $577  million,  an
increase of $646 million over the same period in 2003. Net cash  used
by  operating  activities  for the six months  ended  June  30,  2003
included  the  receipt of a $515 million federal tax refund  and  the
receipt   of  $315  million  from  the  U.S.  government  under   the
Appropriations  Act,  offset by $216 million of  redemption  payments
under operating leases for special facility revenue bonds.

Pension Funding Obligation

As  of  June  30,  2004, the Company had contributed the  entire  $461
million minimum amount it expects to contribute to its defined benefit
pension plans in 2004. The Company expects to contribute a minimum  of
$450  million  to  its  defined benefit pension  plans  in  2005.  The
Company's  estimates of its defined benefit pension plan contributions
reflect  the  provisions of the Pension Funding Equity  Act  of  2004,
which was enacted in April 2004.



                               -12-

RESULTS OF OPERATIONS

For the Six Months Ended June 30, 2004 and 2003

Revenues

The  Company's revenues increased approximately $900 million, or 10.7
percent, to $9.3 billion for the six months ended June 30, 2004  from
the  same  period last year.  American's passenger revenues increased
by  9.2 percent, or $635 million, on a capacity (available seat mile)
(ASM)  increase  of  7.1 percent.  American's passenger  load  factor
increased  1.7  points to 73.5 percent while passenger revenue  yield
per  passenger  mile decreased by 0.5 percent to 11.90  cents.   This
resulted in an increase in passenger revenue per available seat  mile
(RASM)  of  2.0  percent  to  8.75  cents.  Following  is  additional
information regarding American's domestic and international RASM  and
capacity:
<Table>
<Caption>
                               Six Months Ended June 30, 2004
                          RASM        Y-O-Y       ASMs        Y-O-Y
                        (cents)       Change    (billions)   Change
   
                 <c>           <c>        <c>         <c>
   Domestic              8.66          0.5%       59.4        2.9%
   International         8.94          5.2        27.2       17.6
      Latin America      8.98         (0.7)       13.9       22.0
      Europe             8.97          8.7        10.7       10.4
      Pacific            8.59         30.3         2.6       28.4
</Table>
Regional  affiliates' passenger revenues, which are based on industry
standard  mileage  proration agreements  for  flights  connecting  to
American  flights, increased $212 million, or 29.7 percent,  to  $925
million as a result of increased capacity and load factors.  Regional
affiliates'  traffic  increased 33.0 percent to 3.4  billion  revenue
passenger miles (RPMs), while capacity increased 25.0 percent to  5.1
billion  ASMs,  resulting in a 4.0 point increase in  passenger  load
factor to 66.3 percent.

Cargo  revenues increased 10.6 percent, or $29 million, primarily  due
to a 10.7 percent increase in cargo ton miles.

Operating Expenses

The  Company's total operating expenses decreased 1.3 percent, or $117
million,  to  $9.2  billion for the six months  ended  June  30,  2004
compared  to  the  same period in 2003. American's mainline  operating
expenses  per ASM in the six months ended June 30, 2004 decreased  9.5
percent  compared  to  the same period in 2003  to  9.49  cents.  This
decrease  in  operating  expenses per ASM  is  due  primarily  to  the
Company's cost savings initiatives and occurred despite the receipt of
a  grant  from the U.S. government in 2003 and a 20.0 percent increase
in  American's price per gallon of fuel in the six months  ended  June
30, 2004 relative to the same period in 2003. This decrease was offset
somewhat  by  $101 million in special charges in the six months  ended
June 30, 2003.





                                   -13-


<Table>
<Caption>
   (in millions)                   Six Months
                                     Ended       Change   Percentage
   Operating Expenses           June 30, 2004   from 2003   Change
   
                            <c>            <c>         <c>
   Wages, salaries and benefits   $  3,101       $(649)      (17.3)%  (a)
   Aircraft fuel                     1,596         310        24.1    (b)
   Regional payments                   887         128        16.9    (c)
   Commissions, booking fees and
    credit card expense                574          59        11.5    (d)
   Depreciation and amortization       563         (35)       (5.9)
   Other rentals and landing fees      545           2         0.4
   Maintenance, materials and repairs  406          61        17.7    (e)
   Aircraft rentals                    296         (60)      (16.9)   (f)
   Food service                        274         (24)       (8.1)
   Other operating expenses          1,015         (92)       (8.3)
   Special charges                     (31)       (132)         NM    (g)
   U.S. government grant                 -         315          NM    (h)
    Total operating expenses      $  9,226       $(117)       (1.3)%
</Table>
(a)Wages, salaries and benefits decreased due to lower wage rates
  and reduced headcount primarily as a result of the Labor Agreements
  and Management Reductions, discussed in the Company's 2003 Form 10-K,
  which became effective in the second quarter of 2003. This decrease
  was  somewhat offset by increased headcount related  to  capacity
  increases.
(b)Aircraft fuel expense increased due to a 20.0 percent increase in
  American's  price per gallon of fuel (net of the impact  of  fuel
  hedging) and a 3.4 percent increase in American' s fuel consumption.
(c)Regional payments increased primarily due to the 25.0 percent
  increase in Regional Affiliates' capacity.
(d)Commissions, booking fees and credit card expense increased due
  primarily  to  a 9.2 percent increase in the Company's  passenger
  revenues,  particularly the 23.7 percent increase  in  American's
  international passenger revenue, and a 29.7 percent  increase  in
  Regional Affiliates' revenue.
(e)Maintenance, materials and repairs increased primarily due to
  increased aircraft utilization, the benefit from retiring aircraft
  subsiding and increases in contractual rates in certain flight hour
  agreements for outsourced aircraft engine maintenance.
(f)Aircraft rentals decreased primarily due to the removal of leased
  aircraft from the fleet in the second half of 2003 as part of the
  Company's restructuring initiatives and concessionary agreements with
  certain  lessors, which reduced future lease payment amounts  and
  resulted in the conversion of 30 operating leases to capital leases in
  the second quarter of 2003.
(g)Special  charges for 2004 included the reversal  of  reserves
  previously established for (i) aircraft return costs of $20 million
  and (ii) employee severance of $11 million. Special charges for 2003
  included $72 million in employee charges and $49 million in facility
  exit costs offset by a $20 million aircraft related credit to adjust
  prior accruals.
(h)U.S.  government grant for 2003 included the receipt of  $315
  million from the U.S. government under the Appropriations Act.

Other Income (Expense)

Other  income  (expense), historically a net  expense,  increased  $47
million  due  primarily to the following:  Interest expense  increased
$26 million, or 8.8 percent, resulting primarily from the increase  in
the Company's long-term debt. Miscellaneous-net increased $23 million,
due primarily to the accrual during the first quarter of 2004 of a $23
million award rendered by an independent arbitrator and relating to  a
grievance filed by the Allied Pilots Association.

Income Tax Benefit

The  Company  did  not  record a net tax benefit associated  with  its
losses  for  the six months ended June 30, 2004 and 2003  due  to  the
Company providing a valuation allowance, as discussed in Note 5 to the
accompanying condensed consolidated financial statements.


                               -14-

Outlook

Capacity  for  American's  mainline  jet  operations  is  expected  to
increase  about 4.5 percent in the third quarter of 2004  compared  to
the  third  quarter of 2003, and about 5.8 percent for the  full  year
2004 compared to 2003.

Based   on   various  factors,  including  primarily   the   Company's
expectation that fuel prices will remain high during 2004 compared  to
2003,  the  Company now expects that its mainline unit costs  for  the
full year 2004 will be approximately 9.6 cents. This represents a  5.5
percent  improvement over 2003 mainline unit costs. The  Company  will
have  a  full  year  of  labor savings from its Labor  Agreements  and
Management Reductions and will more fully realize the savings from its
other strategic cost savings initiatives. However, in addition to high
fuel prices, there are significant cost challenges in 2004 that affect
the Company's cost reduction efforts including medical benefits costs,
airport fees and maintenance, materials and repairs costs.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Except  as  discussed  below, there have been no material  changes  in
market risk from the information provided in Item 7A. Quantitative and
Qualitative Disclosures About Market Risk of the Company's  2003  Form
10-K.

The  risk inherent in the Company's fuel related market risk sensitive
instruments  and positions is the potential loss arising from  adverse
changes  in  the price of fuel. The sensitivity analyses presented  do
not consider the effects that such adverse changes may have on overall
economic  activity, nor do they consider additional actions management
may   take  to  mitigate  the  Company's  exposure  to  such  changes.
Therefore,  actual results may differ.  The Company does not  hold  or
issue derivative financial instruments for trading purposes.

Aircraft Fuel   The Company's earnings are affected by changes in  the
price  and  availability of aircraft fuel.   In  order  to  provide  a
measure of control over price and supply, the Company trades and ships
fuel  and  maintains  fuel storage facilities to  support  its  flight
operations.  The  Company also manages the price risk  of  fuel  costs
primarily  by  using  jet fuel, heating oil, and crude  oil  swap  and
option  contracts.   Market risk is estimated  as  a  hypothetical  10
percent  increase in the June 30, 2004 cost per gallon of fuel.  Based
on  projected 2004 and 2005 fuel usage through June 30, 2005, such  an
increase  would  result  in an increase to aircraft  fuel  expense  of
approximately $312 million in the remainder of 2004 and the first  six
months  of  2005,  inclusive of the impact of fuel  hedge  instruments
outstanding  at June 30, 2004, and assumes the Company's fuel  hedging
program  remains  effective under Statement  of  Financial  Accounting
Standards No. 133, "Accounting for Derivative Instruments and  Hedging
Activities". Comparatively, based on projected 2004 fuel  usage,  such
an  increase  would  have  resulted in an increase  to  aircraft  fuel
expense of approximately $247 million in 2004, inclusive of fuel hedge
instruments outstanding as of December 31, 2003. The change in  market
risk  is  due  to  the increase in fuel prices and a decrease  in  the
amount of fuel hedged.

As  of  June  30, 2004, the Company had hedged, with option contracts,
approximately  nine percent of its estimated third quarter  2004  fuel
requirements, four percent of its estimated fourth quarter  2004  fuel
requirements  and an insignificant percentage of its  estimated  2005,
2006 and 2007 fuel requirements.

Item 4.  Controls and Procedures

The term "disclosure controls and procedures" is defined in Rules 13a-
15(e)  and  15d-15(e) of the Securities Exchange Act of 1934,  or  the
Exchange  Act.  This term refers to the controls and procedures  of  a
company  that are designed to ensure that information required  to  be
disclosed by a company in the reports that it files under the Exchange
Act  is  recorded, processed, summarized and reported within the  time
periods  specified  by  the  Securities and  Exchange  Commission.  An
evaluation   was  performed  under  the  supervision  and   with   the
participation  of  the  Company's  management,  including  the   Chief
Executive  Officer  (CEO) and Chief Financial Officer  (CFO),  of  the
effectiveness  of the Company's disclosure controls and procedures  as
of June 30, 2004.  Based on that evaluation, the Company's management,
including  the  CEO  and CFO, concluded that the Company's  disclosure
controls  and  procedures were effective as of June 30, 2004.   During
the  quarter  ending  on June 30, 2004, there was  no  change  in  the
Company's   internal  control  over  financial  reporting   that   has
materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.


                                -15-

PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings

On  July  26, 1999, a class action lawsuit was filed, and in  November
1999 an amended complaint was filed, against AMR Corporation, American
Airlines,  Inc.,  AMR  Eagle Holding Corporation,  Airlines  Reporting
Corporation,  and the Sabre Group Holdings, Inc. in the United  States
District  Court  for  the  Central  District  of  California,  Western
Division  (Westways  World Travel, Inc. v. AMR Corp.,  et  al.).   The
lawsuit  alleges that requiring travel agencies to pay debit memos  to
American for violations of American's fare rules (by customers of  the
agencies): (1) breaches the Agent Reporting Agreement between American
and  AMR  Eagle and the plaintiffs; (2) constitutes unjust enrichment;
and  (3)  violates the Racketeer Influenced and Corrupt  Organizations
Act  of 1970 (RICO).  The certified class includes all travel agencies
who  have been or will be required to pay money to American for  debit
memos  for  fare rules violations from July 26, 1995 to  the  present.
The  plaintiffs  seek  to enjoin American from enforcing  the  pricing
rules  in  question and to recover the amounts paid for  debit  memos,
plus  treble damages, attorneys' fees, and costs.  The Company intends
to  vigorously defend the lawsuit.  Although the Company believes that
the  litigation is without merit, a final adverse court decision could
impose   restrictions  on  the  Company's  relationships  with  travel
agencies, which could have an adverse impact on the Company.

On  May  17,  2002,  the named plaintiffs in Hall, et  al.  v.  United
Airlines, et al., pending in the United States District Court for  the
Eastern  District  of  North  Carolina,  filed  an  amended  complaint
alleging that between 1995 and the present, American and over 15 other
defendant  airlines conspired to reduce commissions paid to U.S.-based
travel  agents  in  violation of Section 1 of  the  Sherman  Act.  The
plaintiffs  are seeking monetary damages and injunctive  relief.   The
court  granted  class  action  certification  to  the  plaintiffs   on
September 17, 2002, defining the plaintiff class as all travel  agents
in  the  United  States,  Puerto Rico, and the  United  States  Virgin
Islands, who, at any time from October 1, 1997 to the present,  issued
tickets,  miscellaneous change orders, or prepaid ticket  advices  for
travel on any of the defendant airlines.  The case is stayed as to  US
Airways   and  United  Airlines,  since  they  filed  for  bankruptcy.
American  is  vigorously  defending the lawsuit.   Defendant  carriers
filed  a  motion for summary judgment on December 10, 2002, which  the
court  granted  on  October 30, 2003.  Plaintiffs have  appealed  that
order  to  the  4th Circuit Court of Appeals, and that appeal  remains
pending.  A  final  adverse court decision awarding substantial  money
damages  or placing restrictions on the Company's commission  policies
or practices would have an adverse impact on the Company.

Between  April 3, 2003 and June 5, 2003, three lawsuits were filed  by
travel  agents  some of whom have opted out of the Hall  class  action
(above) to pursue their claims individually against American Airlines,
Inc.,  other  airline  defendants, and in  one  case  against  certain
airline defendants and Orbitz LLC.  (Tam Travel et. al., v. Delta  Air
Lines  et.  al., in the United States District Court for the  Northern
District of California - San Francisco (51 individual agencies), Paula
Fausky  d/b/a  Timeless Travel v. American Airlines, et.  al,  in  the
United States District Court for the Northern District of Ohio Eastern
Division  (29 agencies) and Swope Travel et al. v. Orbitz et.  al.  in
the  United  States District Court for the Eastern District  of  Texas
Beaumont  Division (6 agencies)).  Collectively, these  lawsuits  seek
damages  and  injunctive  relief alleging  that  the  certain  airline
defendants and Orbitz LLC: (i) conspired to prevent travel agents from
acting as effective competitors in the distribution of airline tickets
to  passengers  in  violation of Section 1 of the Sherman  Act;   (ii)
conspired to monopolize the distribution of common carrier air  travel
between airports in the United States in violation of Section 2 of the
Sherman  Act; and that (iii) between 1995 and the present, the airline
defendants  conspired to reduce commissions paid to U.S.-based  travel
agents in violation of Section 1 of the Sherman Act. These cases  have
been consolidated in the United States District Court for the Northern
District  of Ohio Eastern Division.  American is vigorously  defending
these  lawsuits.  A final adverse court decision awarding  substantial
money  damages  or placing restrictions on the Company's  distribution
practices would have an adverse impact on the Company.






                                  -16-


On  April  25, 2002, a Quebec travel agency filed a motion  seeking  a
declaratory  judgment  of  the  Superior  Court  in  Montreal,  Canada
(Voyages  Montambault  (1989)  Inc.  v.  International  Air  Transport
Association,  et al.), that American and the other airline  defendants
owe  a  "fair  and  reasonable commission" to  the  agency,  and  that
American  and the other airline defendants breached alleged  contracts
with  the  agency by adopting policies of not paying base commissions.
The  motion  was  subsequently amended to  add  40  additional  travel
agencies as petitioners.  The current defendants are the International
Air  Transport Association, the Air Transport Association  of  Canada,
Air  Canada,  American, America West Airlines, Delta Air Lines,  Grupo
TACA,  Northwest  Airlines/KLM  Airlines,  and  Continental  Airlines.
American  is  vigorously defending the lawsuit.  Although the  Company
believes  that the litigation is without merit, a final adverse  court
decision  granting  declaratory relief could  expose  the  Company  to
claims  for  substantial money damages or force  the  Company  to  pay
agency  commissions, either of which would have an adverse  impact  on
the  Company. On June 9, 2004, the court dismissed the motion, and the
petitioners did not file an appeal.

On May 13, 2002, the named plaintiffs in Always Travel, et. al. v. Air
Canada,  et.  al.,  pending  in the Federal  Court  of  Canada,  Trial
Division,  Montreal, filed a statement of claim alleging that  between
1995 and the present, American, the other defendant airlines, and  the
International   Air   Transport  Association   conspired   to   reduce
commissions paid to Canada-based travel agents in violation of Section
45  of  the  Competition  Act of Canada.  The  named  plaintiffs  seek
monetary  damages  and  injunctive  relief  and  seek  to  certify   a
nationwide class of travel agents.  Plaintiffs have filed a motion for
class  certification,  but  that motion  has  not  yet  been  decided.
American  is vigorously defending the lawsuit.  A final adverse  court
decision awarding substantial money damages or placing restrictions on
the  Company's commission policies would have an adverse impact on the
Company.

On  August 14, 2002, a class action lawsuit was filed against American
Airlines,  Inc.  in the United States District Court for  the  Central
District  of  California,  Western Division  (All  World  Professional
Travel  Services,  Inc.  v.  American Airlines,  Inc.).   The  lawsuit
alleges  that  requiring  travel  agencies  to  pay  debit  memos  for
refunding  tickets after September 11, 2001:  (1) breaches  the  Agent
Reporting  Agreement between American and plaintiff;  (2)  constitutes
unjust  enrichment;  and  (3) violates the  Racketeer  Influenced  and
Corrupt  Organizations Act of 1970 (RICO).  The alleged class includes
all  travel  agencies who have or will be required to  pay  moneys  to
American  for  an "administrative service charge," "penalty  fee,"  or
other  fee  for  processing refunds on behalf of passengers  who  were
unable  to  use  their tickets in the days immediately  following  the
resumption of air carrier service after the tragedies on September 11,
2001.  On April 1, 2004, the court denied plaintiff's motion for class
certification.  The plaintiff seeks to enjoin American from collecting
the  debit memos and to recover the amounts paid for the debit  memos,
plus  treble damages, attorneys' fees, and costs.  The Company intends
to  vigorously defend the lawsuit.  Although the Company believes that
the  litigation is without merit, a final adverse court decision could
impose   restrictions  on  the  Company's  relationships  with  travel
agencies which could have an adverse impact on the Company.

On  August  19, 2002, a class action lawsuit seeking monetary  damages
was  filed, and on May 7, 2003 an amended complaint was filed  in  the
United  States District Court for the Southern District  of  New  York
(Power Travel International, Inc. v. American Airlines, Inc., et  al.)
against  American,  Continental  Airlines,  Delta  Air  Lines,  United
Airlines, and Northwest Airlines, alleging that American and the other
defendants breached their contracts with the agency and were  unjustly
enriched  when  these  carriers at various times  reduced  their  base
commissions to zero.  The as yet uncertified class includes all travel
agencies accredited by the Airlines Reporting Corporation "whose  base
commissions on airline tickets were unilaterally reduced to  zero  by"
the  defendants.  The case is stayed as to United Airlines,  since  it
filed  for bankruptcy.  American is vigorously defending the  lawsuit.
Although the Company believes that the litigation is without merit,  a
final  adverse  court decision awarding substantial money  damages  or
forcing  the Company to pay agency commissions would have  an  adverse
impact on the Company.







                               -17-


Miami-Dade   County  (the  County)  is  currently  investigating   and
remediating   various   environmental   conditions   at   the    Miami
International Airport (MIA) and funding the remediation costs  through
landing  fees  and various cost recovery methods.  American  Airlines,
Inc.  and AMR Eagle have been named as potentially responsible parties
(PRPs)  for  the contamination at MIA.  During the second  quarter  of
2001,  the  County  filed a lawsuit against 17  defendants,  including
American Airlines, Inc., in an attempt to recover its past and  future
cleanup  costs (Miami-Dade County, Florida v. Advance Cargo  Services,
Inc.,  et al. in the Florida Circuit Court). The Company is vigorously
defending the lawsuit.  In addition to the 17 defendants named in  the
lawsuit, 243 other agencies and companies were also named as PRPs  and
contributors to the contamination.  The case is currently stayed while
the  parties  pursue an alternative dispute resolution  process.   The
County has proposed draft allocation models for remedial costs for the
Terminal  and  Tank Farm areas of MIA.  While it is  anticipated  that
American  and AMR Eagle will be allocated equitable shares of remedial
costs,  the Company does not expect the allocated amounts  to  have  a
material adverse effect on the Company.

Three  cases  (each being a purported class action)  have  been  filed
against American arising from the disclosure of passenger name records
by  a vendor of American.  The cases are:  Kimmell v. AMR, et al.  (U.
S.  District  Court, Texas), Baldwin v. AMR, et al.  (U.  S.  District
Court,  Texas) and Rosenberg v. AMR, et al. (U. S. District Court  New
York).   The  Kimmel suit was filed in April 2004 and the Baldwin  and
Rosenberg  cases  were  filed in May 2004. The  suits  allege  various
causes  of  action,  including but not limited to, violations  of  the
Electronic  Communications  Privacy  Act,  negligent  mispresentation,
breach  of  contract  and violation of alleged common  law  rights  of
privacy.  In each case plaintiffs seek statutory damages of $1000  per
passenger, plus additional unspecified monetary damages.  The  Company
is vigorously defending these suits and believes the suits are without
merit.

















                                 -18-


Item 6.  Exhibits and Reports on Form 8-K

The following exhibits are included herein:

12   Computation of ratio of earnings to fixed charges for the  three
     and six months ended June 30, 2004 and 2003.

31.1 Certification of Chief Executive Officer pursuant to  Rule  13a-14(a).

31.2 Certification of Chief Financial Officer pursuant to  Rule  13a-14(a).

32   Certification pursuant to Rule 13a-14(b) and section 906 of  the
     Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350,
     chapter 63 of title 18, United States Code).

Form 8-Ks filed under Item 5 - Other Events

On April 2, 2004, American filed a report on Form 8-K to provide a
press release issued to report March traffic.

On May 5, 2004, American filed a report on Form 8-K to provide a press
release issued to report April traffic.

On May 19, 2004, American filed a report on Form 8-K to announce that
the Company's Board of Directors named Gerard J. Arpey as its
Chairman.

On June 3, 2004, American filed a report on Form 8-K to provide a
press release issued to report May traffic.

On June 18, 2004, American filed a report on Form 8-K to provide
actual fuel cost, unit cost,  capacity and traffic information for
April and May as well as current fuel cost, unit cost, capacity and
traffic expectations for June, the second quarter and the full year
2004.

Form 8-Ks filed under Item 12 - Disclosure of Results of Operations
and Financial Condition

On  April 22, 2004, American furnished a report on Form 8-K to furnish
a  press  release issued by AMR to announce AMR's first  quarter  2004
results.
















                                    -19-


Signature

Pursuant to the requirements of the Securities Exchange Act of  1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


                               AMERICAN AIRLINES, INC.




Date:  July 22, 2004           BY: /s/ James A. Beer
                               James A. Beer
                               Senior Vice President and Chief
                               Financial Officer (Principal
                               Financial and Accounting Officer)


















                                -20-