|                                                  |
|-------------------------------------------------------|
|                                                  |
|                                                  |
| **UNITED                STATES**                      |
| **SECURITIES                AND EXCHANGE COMMISSION** |

**FORM      10-Q**

**ü**

**For      the      Quarterly Period Ended September 30, 2007.**

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

| Delaware                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                          | 13-1502798                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|-----------------------------------------------------|
| (State                or                other jurisdiction of                incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                          | (I.R.S.                Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                          |                                                |
| 4333                Amon                Carter Blvd.Fort                Worth,                Texas                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                          |  76155                                         |
| (Address                of                principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                          | (Zip                Code)                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                          |                                                |
| 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.  þ  Yes   ¨  No                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Indicate                by                check mark whether the registrant is a large accelerated filer, an                accelerated filer, or a non-accelerated filer.  See definition                of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the                Exchange Act.   ¨ Large                Accelerated                Filer     ¨ Accelerated                Filer     þ Non-accelerated                Filer |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 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 October 12, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 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.                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

**AMERICAN      AIRLINES, INC.**

----

**PART      I:  FINANCIAL INFORMATION**

**Item      1.  Financial Statements**

**AMERICAN      AIRLINES, INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

|                                                                         |   |                                             |   |   |                                            |   |
|------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|-------------------------------------------------|--------|
|                                                                         |   | Three                Months                Ended |   |   | Nine                Months                Ended |   |
|                                                                         |   | September                30,                     |   |   | September                30,                    |   |
|                                                                         |   | 2007                                             |   |   | 2006                                            |   |   | 2007 |   |   | 2006 |   |
| **Revenues**                                                                 |   |                                             |   |   |                                            |   |   |   |   |   |   |   |
|     Passenger                                            |   | $                                                | 4,750  |   |                                            | $      | 4,657 |   |   | $ | 13,749 |   |   | $ | 13,621 |   |
|     Regional                Affiliates                   |   |                                             | 648    |   |                                            |   | 644 |   |   |   | 1,864 |   |   |   | 1,915 |   |
|     Cargo                                                |   |                                             | 196    |   |                                            |   | 213 |   |   |   | 597 |   |   |   | 605 |   |
|     Other                revenues                        |   |                                             | 328    |   |                                            |   | 316 |   |   |   | 967 |   |   |   | 975 |   |
|       Total                operating revenues  |   |                                             | 5,922  |   |                                            |   | 5,830 |   |   |   | 17,177 |   |   |   | 17,116 |   |
|                                                                         |   |                                             |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
| **Expenses**                                                                 |   |                                             |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|   Wages,                salaries and benefits                      |   |                                             | 1,561  |   |                                            |   | 1,541 |   |   |   | 4,568 |   |   |   | 4,644 |   |
|   Aircraft                fuel                                     |   |                                             | 1,570  |   |                                            |   | 1,600 |   |   |   | 4,324 |   |   |   | 4,476 |   |
|   Regional                payments to AMR Eagle                    |   |                                             | 572    |   |                                            |   | 570 |   |   |   | 1,695 |   |   |   | 1,656 |   |
|   Other                rentals and landing fees                    |   |                                             | 298    |   |                                            |   | 284 |   |   |   | 883 |   |   |   | 870 |   |
|   Commissions,                booking fees and credit card expense |   |                                             | 270    |   |                                            |   | 284 |   |   |   | 787 |   |   |   | 839 |   |
|   Depreciation                and amortization                     |   |                                             | 259    |   |                                            |   | 243 |   |   |   | 749 |   |   |   | 726 |   |
|   Maintenance,                materials and repairs                |   |                                             | 214    |   |                                            |   | 201 |   |   |   | 617 |   |   |   | 575 |   |
|   Aircraft                rentals                                  |   |                                             | 144    |   |                                            |   | 149 |   |   |   | 441 |   |   |   | 434 |   |
|   Food                service                                      |   |                                             | 137    |   |                                            |   | 130 |   |   |   | 392 |   |   |   | 381 |   |
|   Other                operating expenses                          |   |                                             | 632    |   |                                            |   | 608 |   |   |   | 1,879 |   |   |   | 1,823 |   |
|     Total                operating expenses              |   |                                             | 5,657  |   |                                            |   | 5,610 |   |   |   | 16,335 |   |   |   | 16,424 |   |
|                                                                         |   |                                             |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                Income**                                          |   |                                             | 265    |   |                                            |   | 220 |   |   |   | 842 |   |   |   | 692 |   |
|                                                                         |   |                                             |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
| **Other                Income (Expense)**                                    |   |                                             |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|   Interest                income                                   |   |                                             | 88     |   |                                            |   | 79 |   |   |   | 248 |   |   |   | 198 |   |
|   Interest                expense                                  |   |                                             | (177   | )      |                                            |   | (202 | ) |   |   | (546 | ) |   |   | (603 | ) |
|   Interest                capitalized                              |   |                                             | 2      |   |                                            |   | 7 |   |   |   | 16 |   |   |   | 21 |   |
|   Related                party interest - net                      |   |                                             | (23    | )      |                                            |   | (15 | ) |   |   | (64 | ) |   |   | (32 | ) |
|   Miscellaneous                - net                               |   |                                             | (9     | )      |                                            |   | (88 | ) |   |   | (28 | ) |   |   | (101 | ) |
|                                                                         |   |                                             | (119   | )      |                                            |   | (219 | ) |   |   | (374 | ) |   |   | (517 | ) |
|                                                                         |   |                                             |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
| **Income                Before Income Taxes**                                |   |                                             | 146    |   |                                            |   | 1 |   |   |   | 468 |   |   |   | 175 |   |
| Income                tax                                                    |   |                                             | -      |   |                                            |   | - |   |   |   | - |   |   |   | - |   |
| **Net                Earnings**                                              |   | $                                                | 146    |   |                                            | $      | 1 |   |   | $ | 468 |   |   | $ | 175 |   |

----

**AMERICAN      AIRLINES, INC.**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                                    |   |                         |   |   |                        |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|-----------------------------|--------|
|                                                                                                                    |   | September                30, |   |   | December                31, |   |
|                                                                                                                    |   | 2007                         |   |   | 2006                        |   |
| **Assets**                                                                                                              |   |                         |   |   |                        |   |
| **Current                Assets**                                                                                       |   |                         |   |   |                        |   |
|   Cash                                                                                                        |   | $                            | 156    |   |                        | $      | 120 |   |
|   Short-term                investments                                                                       |   |                         | 5,143  |   |                        |   | 4,527 |   |
|   Restricted                cash and short-term investments                                                   |   |                         | 447    |   |                        |   | 468 |   |
|   Receivables,                net                                                                             |   |                         | 1,141  |   |                        |   | 957 |   |
|   Inventories,                net                                                                             |   |                         | 507    |   |                        |   | 465 |   |
|   Other                current assets                                                                         |   |                         | 490    |   |                        |   | 213 |   |
|     Total                current assets                                                             |   |                         | 7,884  |   |                        |   | 6,750 |   |
|                                                                                                                    |   |                         |   |   |                        |   |   |   |
| **Equipment                and Property**                                                                               |   |                         |   |   |                        |   |   |   |
|   Flight                equipment, net                                                                        |   |                         | 11,281 |   |                        |   | 11,524 |   |
|   Other                equipment and property, net                                                            |   |                         | 2,378  |   |                        |   | 2,343 |   |
|   Purchase                deposits for flight equipment                                                       |   |                         | 177    |   |                        |   | 177 |   |
|                                                                                                                    |   |                         | 13,836 |   |                        |   | 14,044 |   |
|                                                                                                                    |   |                         |   |   |                        |   |   |   |
| **Equipment                and Property Under Capital Leases**                                                          |   |                         |   |   |                        |   |   |   |
|   Flight                equipment, net                                                                        |   |                         | 710    |   |                        |   | 765 |   |
|   Other                equipment and property, net                                                            |   |                         | 82     |   |                        |   | 99 |   |
|                                                                                                                    |   |                         | 792    |   |                        |   | 864 |   |
|                                                                                                                    |   |                         |   |   |                        |   |   |   |
| Route                acquisition costs and airport operating and gate   lease                rights, net |   |                         | 1,141  |   |                        |   | 1,143 |   |
| Other                assets                                                                                             |   |                         | 2,745  |   |                        |   | 3,049 |   |
|                                                                                                                    |   | $                            | 26,398 |   |                        | $      | 25,850 |   |
| **Liabilities                and Stockholder’s Equity (Deficit)**                                                 |   |                         |   |   |                        |   |   |   |
| **Current                Liabilities**                                                                                  |   |                         |   |   |                        |   |   |   |
|   Accounts                payable                                                                             |   | $                            | 1,190  |   |                        | $      | 987 |   |
|   Accrued                liabilities                                                                          |   |                         | 2,114  |   |                        |   | 2,164 |   |
|   Air                traffic liability                                                                        |   |                         | 4,268  |   |                        |   | 3,782 |   |
|   Payable                to affiliates, net                                                                   |   |                         | 1,504  |   |                        |   | 1,071 |   |
|   Current                maturities of long-term debt                                                         |   |                         | 1,106  |   |                        |   | 1,012 |   |
|   Current                obligations under capital leases                                                     |   |                         | 138    |   |                        |   | 101 |   |
|     Total                current liabilities                                                        |   |                         | 10,320 |   |                        |   | 9,117 |   |
|                                                                                                                    |   |                         |   |   |                        |   |   |   |
| Long-term                debt, less current maturities                                                                  |   |                         | 6,726  |   |                        |   | 7,787 |   |
| Obligations                under capital leases, less current obligations                                               |   |                         | 698    |   |                        |   | 824 |   |
| Pension                and                postretirement benefits                                                       |   |                         | 5,233  |   |                        |   | 5,340 |   |
| Other                liabilities, deferred gains and deferred credits                                                   |   |                         | 3,758  |   |                        |   | 3,848 |   |
|                                                                                                                    |   |                         |   |   |                        |   |   |   |
| **Stockholder’s                Equity (Deficit)**                                                                 |   |                         |   |   |                        |   |   |   |
|   Common                stock                                                                                 |   |                         | -      |   |                        |   | - |   |
|   Additional                paid-in capital                                                                   |   |                         | 3,846  |   |                        |   | 3,667 |   |
|   Accumulated                other comprehensive loss                                                         |   |                         | (1,317 | )      |                        |   | (1,399 | ) |
|   Accumulated                deficit                                                                          |   |                         | (2,866 | )      |                        |   | (3,334 | ) |
|                                                                                                                    |   |                         | (337   | )      |                        |   | (1,066 | ) |
|                                                                                                                    |   | $                            | 26,398 |   |                        | $      | 25,850 |   |

----

**AMERICAN      AIRLINES, INC.**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

|                                                                                                 |   | Nine                Months                Ended September 30, |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                                                 |   | 2007                                                          |   |   | 2006 |   |
|  **Net                Cash Provided by Operating Activities**                                   |   | $                                                             | 1,663  |   |   | $ | 1,520 |   |
|                                                                                                 |   |                                                          |   |   |   |   |   |   |
| **Cash                Flow from Investing Activities:**                                              |   |                                                          |   |   |   |   |   |   |
|   Capital                expenditures                                                      |   |                                                          | (480   | ) |   |   | (336 | ) |
|   Net                increase in short-term investments                                    |   |                                                          | (616   | ) |   |   | (1,243 | ) |
|   Net                decrease in restricted cash and short-term investments                |   |                                                          | 21     |   |   |   | 46 |   |
|   Proceeds                from sale of equipment and property                              |   |                                                          | 22     |   |   |   | 3 |   |
|   Other                                                                                    |   |                                                          | 7      |   |   |   | (8 | ) |
|         Net                cash used by investing activities |   |                                                          | (1,046 | ) |   |   | (1,538 | ) |
|                                                                                                 |   |                                                          |   |   |   |   |   |   |
| **Cash                Flow from Financing Activities:**                                              |   |                                                          |   |   |   |   |   |   |
|   Payments                on long-term debt and capital lease obligations                  |   |                                                          | (1,069 | ) |   |   | (491 | ) |
|   Reimbursement                from construction reserve account                           |   |                                                          | 61     |   |   |   | 107 |   |
|   Funds                transferred from affiliates, net                                    |   |                                                          | 427    |   |   |   | 380 |   |
|         Net                cash used by financing activities |   |                                                          | (581   | ) |   |   | (4 | ) |
|                                                                                                 |   |                                                          |   |   |   |   |   |   |
| Net                increase                (decrease) in cash                                        |   |                                                          | 36     |   |   |   | (22 | ) |
| Cash                at                beginning of period                                            |   |                                                          | 120    |   |   |   | 133 |   |
|                                                                                                 |   |                                                          |   |   |   |   |   |   |
| Cash                at end                of period                                                  |   | $                                                             | 156    |   |   | $ | 111 |   |
|                                                                                                 |   |                                                          |   |   |   |   |   |   |

----

|   | **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, 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). The condensed consolidated financial                statements also include the accounts of variable interest entities                for                which the Company is the primary beneficiary. For further information,                refer to the consolidated financial statements and footnotes thereto                included in the American Airlines, Inc. Annual Report on Form 10-K/A                for                the year ended December 31, 2006 (2006 Form                10-K). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | During                the                three months ended September 30, 2007, the Company recorded a charge                of                $40 million to correct certain vacation accruals included in Wages,                salaries and benefits expense.  Of this amount, $30 million                related to the years 2003 through 2006 and $10 million related to                the six                months ended June 30, 2007.  The adjustment was made in the 2007                third quarter as the amount of the adjustment was not material to                prior                periods, expected 2007 results or the trend of earnings in any                period.  This materiality evaluation included, among other                things, the consideration of an individually immaterial out-of-period                correction previously recorded in the second quarter of 2007 that                had an                offsetting impact of approximately $14 million.  The immaterial                adjustment from the second quarter of 2007 related to a revenue related                estimate. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | In                March 2007,                American announced its intent to pull forward the delivery                of 47                Boeing 737 aircraft that American had previously committed to acquire                in                2013 through 2016.  During the third quarter, American                accelerated the delivery of three of these aircraft into the second                half                of 2009.  Any decisions to accelerate additional deliveries will                depend on a number of factors, including future economic industry                conditions and the financial conditions of the Company.  As of                September 30, 2007, the Company had commitments to acquire twelve                Boeing                737-800s in 2009 and an aggregate of 35 Boeing 737 aircraft and seven                Boeing 777 aircraft in 2013 through 2016. Future payments for all                aircraft, including the estimated amounts for price escalation, are                currently estimated to be approximately $2.8 billion, with the majority                occurring in 2011 through 2016.  However, if the Company commits                to accelerating the delivery dates of a significant number of aircraft                in                the future, a significant portion of the $2.8 billion commitment                will be                accelerated into earlier periods, including 2008 and 2009.  The                obligation in 2008 and 2009 for the twelve aircraft already pulled                forward                is approximately $370 million.  This amount is net of purchase                deposits currently held by the manufacturer.  On October 1,                2007, American exercised an option to purchase an incremental Boeing                737                aircraft for delivery in early                2009. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Accumulated                depreciation of owned equipment and property at September 30, 2007                and                December 31, 2006 was $10.5 billion and $10.0 billion,                respectively.  Accumulated amortization of equipment and                property under capital leases was $1.2 billion and $1.1 billion at                September 30, 2007 and December 31, 2006,                respectively. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

** AMERICAN      AIRLINES, INC.**

|   | **NOTES                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                (CONTINUED)** |
|--------|----------------------------------------------------------------------------------------------------|

|   | (Unaudited) |
|--------|-------------|

| 5. | In                April                2007, the United States and the European Union approved an “open skies”                air services agreement that provides airlines from the United States                and                E.U. member states open access to each other’s markets, with freedom of                pricing and unlimited rights to fly beyond the United States and                beyond                each E.U. member state.  The provisions of the agreement will                take effect on March 30, 2008.  Under the agreement, every U.S.                and E.U. airline is authorized to operate between airports in the                United                States and London’s Heathrow Airport.  Only three airlines                besides American were previously allowed to provide that Heathrow                service.  The agreement will result in the Company facing                increased competition in serving Heathrow as additional carriers                are able                to obtain necessary slots and terminal facilities.  However, the                Company believes that American and the other carriers who currently                have                existing authorities and the related slots and facilities will continue                to                hold a significant advantage after the advent of open                skies.  The Company has recorded route acquisition costs                (including international routes and slots) of $846 million as of                September                30, 2007, including a significant amount related to operations at                Heathrow.  The Company considers these assets indefinite life                assets under Statement of Financial Accounting Standard No. 142 “Goodwill                and Other Intangibles” and as a result they are not amortized but instead                are tested for impairment annually or more frequently if events or                changes                in circumstances indicate that the asset might be impaired.  The                Company completed an impairment analysis on the Heathrow routes (including                slots) effective March 31, 2007 and concluded that no impairment                exists.  The Company believes its estimates and assumptions are                reasonable, however, the market for LHR slots is still developing                and only                a limited number of comparable transactions have occurred to                date.  The Company will continue to evaluate future transactions                involving purchases of slots at LHR and the potential impact of those                transactions on the value of the Company’s routes and                slots. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

** AMERICAN      AIRLINES, INC.**

|   | **NOTES                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                (CONTINUED)** |
|--------|----------------------------------------------------------------------------------------------------|

|   | (Unaudited) |
|--------|-------------|

| 6. | On                January 1,                2007, the Company adopted Financial Accounting Standards Board                Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN                48).  FIN 48 prescribes a recognition threshold that a tax                position is required to meet before being recognized in the financial                statements and provides guidance on derecognition, measurement,                classification, interest and penalties, accounting in interim periods,                disclosure and transition issues. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                Company                has an unrecognized tax benefit of approximately $38 million which                did not                change significantly during the nine months ended September 30,                2007.  The application of FIN 48 would have resulted in an                immaterial change in retained earnings, except that the increase                was fully                offset by the application of a valuation allowance.  In                addition, future changes in the unrecognized tax benefit will have                no                impact on the effective tax rate due to the existence of the valuation                allowance.  Accrued interest on tax positions is recorded as a                component of interest expense but is not significant at September                30,                2007.  The Company does not reasonably estimate that the                unrecognized tax benefit will change significantly within the next                twelve                months. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                Company                files its tax returns as prescribed by the tax laws of the jurisdictions                in which it operates.  The Company is currently under audit by                the Internal Revenue Service for its 2001 through 2003 tax years                with an                anticipated closing date in 2008.  The Company’s 2004 and 2005                tax years are still subject to examination.  Various state and                foreign jurisdiction tax years remain open to examination as well,                though                the Company believes any additional assessment will be immaterial                to its                consolidated financial statements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As                discussed                in Note 8 to the consolidated financial statements in the 2006 Form                10-K,                the Company has a valuation allowance against the full amount of                its net                deferred tax asset.  The Company provides a valuation allowance                against deferred tax assets when it is more likely than not that                some                portion, or all of its deferred tax assets, will not be                realized.  The Company's deferred tax asset valuation allowance                decreased approximately $61 million during the nine months ended                September                30, 2007 to $1.7 billion, including the impact of comprehensive income                for                the nine months ended September 30, 2007, changes described above                from                applying FIN 48 and certain other                adjustments. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**. **

----

** AMERICAN      AIRLINES, INC.**

|   | **NOTES                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                (CONTINUED)** |
|--------|----------------------------------------------------------------------------------------------------|

|   | (Unaudited) |
|--------|-------------|

| 7.   | As                of                September 30, 2007, American had issued guarantees covering approximately                $1.1 billion of AMR’s unsecured debt.  In addition, as of                September 30, 2007, AMR and American had issued guarantees covering                approximately $347 million of AMR Eagle’s secured                debt. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8. | On                January                16, 2007, the AMR Board of Directors approved the amendment and                restatement of the 2005-2007 Performance Share Plan for Officers                and Key                Employees and the 2005 Deferred Share Award Agreement to permit settlement                in a combination of cash and/or stock.  However, the amendments                did not impact the fair value of the awards.  As a result,                certain awards under these plans have been accounted for as equity                awards                since that date and the Company reclassified $122 million from Accrued                liabilities to Additional paid-in-capital in accordance with Statement                of                Financial Accounting Standard No. 123 (revised 2004), “Share-Based                Payment”. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On                January                26, 2007, AMR completed a public offering of 13 million shares of                its                common stock.  AMR realized $497 million from the sale of                equity.  The proceeds from the transaction were transferred to                American. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | **AMERICAN                AIRLINES, INC.** |
|--------|--------------------------------------------|

|   | **NOTES                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                (CONTINUED)** |
|--------|----------------------------------------------------------------------------------------------------|

|   | (Unaudited) |
|--------|-------------|

| 9.   | The                following                tables provide the components of net periodic benefit cost for the                three                and nine months ended September 30, 2007 and 2006 (in                millions): |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                  |   | Pension                Benefits                                              |   |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                                  |   | Three                Months                EndedSeptember                30, |   |   | Nine                Months                EndedSeptember                30, |   |
|                                                                  |   | 2007                                                                         |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
| Components                of                net periodic benefit cost |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
| Service                cost                                           |   | $                                                                            | 93     |   |   | $ | 100 |   |   | $ | 278 |   |   | $ | 299 |   |
| Interest                cost                                          |   |                                                                         | 168    |   |   |   | 160 |   |   |   | 504 |   |   |   | 481 |   |
| Expected                return on assets                              |   |                                                                         | (187   | ) |   |   | (167 | ) |   |   | (561 | ) |   |   | (502 | ) |
| Amortization                of:                                       |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior                service                cost                      |   |                                                                         | 4      |   |   |   | 4 |   |   |   | 12 |   |   |   | 12 |   |
| Unrecognized                net loss                                  |   |                                                                         | 6      |   |   |   | 20 |   |   |   | 19 |   |   |   | 60 |   |
|                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                periodic                benefit cost               |   | $                                                                            | 84     |   |   | $ | 117 |   |   | $ | 252 |   |   | $ | 350 |   |

|                                                                  |   | Other                Postretirement Benefits                                 |   |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                                  |   | Three                Months                EndedSeptember                30, |   |   | Nine                Months                EndedSeptember                30, |   |
|                                                                  |   | 2007                                                                         |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
| Components                of                net periodic benefit cost |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
| Service                cost                                           |   | $                                                                            | 18     |   |   | $ | 20 |   |   | $ | 53 |   |   | $ | 58 |   |
| Interest                cost                                          |   |                                                                         | 49     |   |   |   | 49 |   |   |   | 145 |   |   |   | 145 |   |
| Expected                return on assets                              |   |                                                                         | (4     | ) |   |   | (3 | ) |   |   | (13 | ) |   |   | (11 | ) |
| Amortization                of:                                       |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior                service                cost                      |   |                                                                         | (3     | ) |   |   | (2 | ) |   |   | (10 | ) |   |   | (7 | ) |
| Unrecognized                net loss                                  |   |                                                                         | (1     | ) |   |   | - |   |   |   | (5 | ) |   |   | 1 |   |
|                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                periodic                benefit cost               |   | $                                                                            | 59     |   |   | $ | 64 |   |   | $ | 170 |   |   | $ | 186 |   |

----

|   | **AMERICAN                AIRLINES, INC.** |
|--------|--------------------------------------------|

|   | **NOTES                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                (CONTINUED)** |
|--------|----------------------------------------------------------------------------------------------------|

|   | (Unaudited) |
|--------|-------------|

| 10.   | As                a result                of the revenue environment, high fuel prices and the Company’s                restructuring activities, the Company has recorded a number of charges                during the last few years. The following table summarizes the components                and remaining accruals for these charges (in millions): |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                         | Aircraft                Charges |   | Facility                Exit                Costs |   |  Total |   |
|--------|----------------------------------------------------------------------------------------------|---------------------------------|--------|---------------------------------------------------|--------|-------------|--------|
|   | Remaining                accrual at                    December 31, 2006 |  $126                      |   |  $19                                         |   |  $145  |   |
|   | Payments                                                                                     | (11)                            |   | (1)                                               |   | (12)        |   |
|   | Remaining                accrual at                    September 30, 2007     |  $115                      |   |  $18                                         |   |  $133  |   |

| 11.   | The                Company includes changes in the fair value of certain derivative                financial instruments that qualify for hedge accounting and unrealized                gains and losses on available-for-sale securities in comprehensive                income.  For                the three                months ended September 30, 2007 and 2006, comprehensive income (loss)                was                $156 million and $(45) million, respectively, and for the nine months                ended September 30, 2007 and 2006, comprehensive income was $550                million                and $160 million, respectively. The difference between net earnings                and comprehensive income for the three and nine months ended September                30,                2007 and 2006 is due primarily to the accounting for the Company’s                derivative financial instruments. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12. | On                July 3,                2007, American entered into an agreement to sell all of its shares                in                ARINC Incorporated.  Upon closing, which is expected to occur                during the fourth quarter of 2007, American expects to receive proceeds                of                approximately $194 million and to record a gain on the sale of                approximately $140 million.  The closing of the transaction is                subject to the satisfaction of a number of conditions, many of which                are                beyond American’s control, and no assurance can be given that such closing                will occur. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

**Forward-Looking      Information**

**Overview**

----

----

**LIQUIDITY      AND CAPITAL RESOURCES**

**Significant      Indebtedness and Future Financing**

**Credit      Facility Covenants**

----

**Pension      Funding Obligation**

**Compensation**

**Cash      Flow Activity**

----

**RESULTS      OF      OPERATIONS**

**For      the      Nine Months Ended September 30, 2007 and 2006**

**Revenues**

|                                               |   | Nine                Months                Ended September 30, 2007 |   |
|----------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                               |   | RASM(cents)                                                        |   |   | Y-O-YChange |   |   | ASMs                (billions) |   |   | Y-O-YChange |   |
|                                               |   |                                                               |   |   |   |   |   |   |   |   |   |   |
| DOT                Domestic                        |   |                                                               | 10.6   |   |   |   | 2.6 | % |   |   | 81.4 |   |   |   | (3.4 | )% |
| International                                      |   |                                                               | 11.1   |   |   |   | 7.3 |   |   |   | 46.3 |   |   |   | (2.9 | ) |
|    DOT                Latin America |   |                                                               | 11.3   |   |   |   | 5.8 |   |   |   | 22.3 |   |   |   | 0.4 |   |
|    DOT                Atlantic      |   |                                                               | 11.1   |   |   |   | 4.8 |   |   |   | 18.9 |   |   |   | (1.2 | ) |
|    DOT                Pacific       |   |                                                               | 10.2   |   |   |   | 21.9 |   |   |   | 5.1 |   |   |   | (19.8 | ) |

----

**Operating      Expenses**

| (in                millions)  Operating                Expenses |   | Nine                Months                EndedSeptember                30,                2007 |   |   | Increase                /                (Decrease) from 2006 |   |   | Percentage                Change |   |
|---------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|----------------------------------|--------|
|                                                                      |   |                                                                                            |   |   |                                                          |   |   |                             |   |
| Wages,                salaries and benefits                               |   | $                                                                                               | 4,568  |   |                                                          | $      | (76    | )                                |   |   | (1.6 | )% |
| Aircraft                fuel                                              |   |                                                                                            | 4,324  |   |                                                          |   | (152   | )                                |   |   | (3.4 | ) |
| Regional                payments to AMR Eagle                             |   |                                                                                            | 1,695  |   |                                                          |   | 39     |                             |   |   | 2.4 |   |
| Other                rentals                and landing fees              |   |                                                                                            | 883    |   |                                                          |   | 13     |                             |   |   | 1.5 |   |
| Commissions,                booking fees and credit card expense          |   |                                                                                            | 787    |   |                                                          |   | (52    | )                                |   |   | (6.2 | ) |
| Depreciation                and amortization                              |   |                                                                                            | 749    |   |                                                          |   | 23     |                             |   |   | 3.2 |   |
| Maintenance,                materials and repairs                         |   |                                                                                            | 617    |   |                                                          |   | 42     |                             |   |   | 7.3 |   |
| Aircraft                rentals                                           |   |                                                                                            | 441    |   |                                                          |   | 7      |                             |   |   | 1.6 |   |
| Food                service                                               |   |                                                                                            | 392    |   |                                                          |   | 11     |                             |   |   | 2.9 |   |
| Other                operating expenses                                   |   |                                                                                            | 1,879  |   |                                                          |   | 56     |                             |   |   | 3.1 |   |
| Total                operating expenses                                   |   | $                                                                                               | 16,335 |   |                                                          | $      | (89    | )                                |   |   | (0.5 | )% |

|   | **Other                Income (Expense)** |
|--------|-------------------------------------------|

|   | **Income                Tax** |
|--------|-------------------------------|

----

**Regional      Affiliates**

|                                                          |   | Nine                Months                EndedSeptember                30, |   |
|---------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
|                                                          |   | 2007                                                                        |   |   | 2006 |   |
| Revenues:                                                     |   |                                                                        |   |   |   |   |
| Regional                Affiliates                            |   | $                                                                           | 1,864  |   |   | $ | 1,915 |   |
| Other                                                         |   |                                                                        | 76     |   |   |   | 75 |   |
|                                                          |   | $                                                                           | 1,940  |   |   | $ | 1,990 |   |
|                                                          |   |                                                                        |   |   |   |   |   |   |
| Expenses:                                                     |   |                                                                        |   |   |   |   |   |   |
| Payments                to                Regional Affiliates |   | $                                                                           | 1,842  |   |   | $ | 1,808 |   |
| Other                incurred expenses                        |   |                                                                        | 236    |   |   |   | 237 |   |
|                                                          |   | $                                                                           | 2,078  |   |   | $ | 2,045 |   |

|   | **Outlook** |
|--------|-------------|

----

|   | **Item                3.  Quantitative and Qualitative Disclosures about Market                Risk** |
|--------|-----------------------------------------------------------------------------------------------------------------|

***Aircraft      Fuel***

----

**Item      4.  Controls and Procedures**

----

**PART      II:  OTHER INFORMATION**

**Item      1.  Legal Proceedings**

----

----

----

----

| **Item                6.  Exhibits**                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                      |
| The                following                exhibits are included herein: |
|                                                                      |
| 10.1                                                                      | Stock                purchase                agreement dated as of July 3, 2007, between American Airlines, Inc.,                Radio                Acquisition Corp., ARINC Incorporated, and the other parties identified                therein.  Portions of this Exhibit have been omitted and                filed separately with the Securities and Exchange Commission pursuant                to a                confidential treatment request under Rule 24b-2 of the Securities                and                Exchange Act of 1934, as amended. |
|                                                                      |
| 12                                                                        | Computation                of ratio of earnings to fixed charges for the three and nine months                ended                September 30, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                      |
| 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).                                                                                                                                                                                                                                                                                                                  |

----

**Signature**

|   | American                Airlines, Inc. |
|--------|----------------------------------------|

| Date:  October                18, 2007 | BY:    | /s/                Thomas W.                Horton                         |   |
|--------------------------------------------------|--------|----------------------------------------------------------------------------|--------|
|                                             |   | Thomas                W.                Horton                             |
|                                             |   | Executive                Vice President and Chief Financial Officer        |
|                                             |   | (Principal                Financial and Accounting                Officer) |

----