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

                            FORM 10-Q



[x]Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2006.


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


Commission file number 1-2691.



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

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

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

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



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


Indicate by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section 13  or  15(d)  of  the
Securities Exchange Act of 1934 during the preceding  12  months
(or for such shorter period that the registrant was required  to
file  such  reports), and (2) has been subject  to  such  filing
requirements for the past 90 days.  x  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
 x 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 July 21, 2006.

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


                                 INDEX

                        AMERICAN AIRLINES, INC.




PART I:   FINANCIAL INFORMATION


Item 1.  Financial Statements

  Consolidated Statements of Operations -- Three and six months ended
  June 30, 2006 and 2005

  Condensed Consolidated Balance Sheets -- June 30, 2006 and December
  31, 2005

  Condensed Consolidated Statements of Cash Flows -- Six months ended
  June 30, 2006 and 2005

  Notes  to  Condensed Consolidated Financial Statements -- June  30,
  2006

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

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Item 4.  Controls and Procedures


PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings

Item 5.  Other Information

Item 6.  Exhibits


SIGNATURE



                  PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements

AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In millions)

                                   Three Months Ended   Six Months Ended
                                      June 30,              June 30,
                                   2006      2005       2006       2005
Revenues
  Passenger                      $ 4,720   $ 4,264    $ 8,964    $ 8,106
  Regional Affiliates                702       561      1,271      1,012
  Cargo                              206       197        392        380
  Other revenues                     331       274        659        535
   Total operating revenues        5,959     5,296     11,286     10,033


Expenses
  Wages, salaries and benefits     1,527     1,528      3,103      3,030
  Aircraft fuel                    1,544     1,224      2,876      2,220
  Regional payments to AMR Eagle     554       510      1,086        983
  Other rentals and landing fees     300       289        586        562
  Commissions, booking fees
   and credit card expense           286       286        555        557
  Depreciation and amortization      243       240        483        485
  Maintenance, materials and
   repairs                           187       210        374        402
  Aircraft rentals                   144       143        285        286
  Food service                       128       125        251        248
  Other operating expenses           626       588      1,215      1,151
   Total operating expenses        5,539     5,143     10,814      9,924

Operating Income                     420       153        472        109

Other Income (Expense)
  Interest income                     67        28        119         63
  Interest expense                  (200)     (162)      (401)      (337)
  Interest capitalized                 7        24         14         46
  Related party interest - net       (11)       (2)       (17)        (4)
  Miscellaneous - net                 (3)        -        (13)        (7)
                                    (140)     (112)      (298)      (239)

Income (Loss) Before Income Taxes    280        41        174       (130)
Income tax                             -         -          -          -
Net Earnings (Loss)               $  280    $   41    $   174    $  (130)








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


                                         1


AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In millions)

                                             June 30,      December 31,
                                               2006           2005
Assets
Current Assets
 Cash                                       $    164     $     133
 Short-term investments                        4,936         3,637
 Restricted cash and short-term
   investments                                   525           510
 Receivables, net                              1,097           967
 Inventories, net                                466           474
 Other current assets                            516           321
   Total current assets                        7,704         6,042

Equipment and Property
 Flight equipment, net                        11,695        11,696
 Other equipment and property, net             2,326         2,352
 Purchase deposits for flight equipment          176           277
                                              14,197        14,325

Equipment and Property Under Capital Leases
 Flight equipment, net                           798           916
 Other equipment and property, net               108           102
                                                 906         1,018

Route   acquisition   costs   and   airport
  operating and gate lease rights, net         1,156         1,167
Other assets                                   3,414         3,489
                                           $  27,377     $  26,041

Liabilities and Stockholder's Equity (Deficit)
Current Liabilities
 Accounts payable                          $   1,178     $     998
 Accrued liabilities                           2,193         2,205
 Air traffic liability                         4,440         3,615
 Payable to affiliates, net                      978           544
 Current maturities of long-term debt            811           829
 Current obligations under capital leases         97           138
   Total current liabilities                   9,697         8,329

Long-term debt, less current maturities        8,532         8,785
Obligations  under  capital  leases,  less
  current obligations                            861           922
Pension and postretirement benefits            4,956         4,998
Other  liabilities,  deferred  gains   and
  deferred credits                             4,088         4,186

Stockholder's Equity (Deficit)
  Common stock                                     -             -
  Additional paid-in capital                   3,623         3,406
  Accumulated other comprehensive loss        (1,056)       (1,087)
  Accumulated deficit                         (3,324)       (3,498)
                                                (757)       (1,179)
                                           $  27,377     $  26,041


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


                                         2



AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In millions)

                                              Six Months Ended June 30,
                                                  2006          2005

Net Cash Provided by Operating Activities      $ 1,452      $   918

Cash Flow from Investing Activities:
  Capital expenditures                            (238)        (222)
  Net increase in short-term investments        (1,299)        (415)
  Net increase in restricted cash and short-
    term investments                               (15)         (14)
  Proceeds from sale of equipment and property       9           13
  Other                                             (6)           1
      Net cash used by investing activities     (1,549)        (637)


Cash Flow from Financing Activities:
  Payments on long-term debt and capital
    lease obligations                             (380)        (299)
  Reimbursement from construction reserve
    account                                         75            -
  Funds transferred from affiliates, net           433           59
      Net cash provided (used) by
        financing activities                       128         (240)

Net increase in cash                                31           41
Cash at beginning of period                        133          117

Cash at end of period                          $   164      $   158


























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


                                         3




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

1. The  accompanying  unaudited  condensed  consolidated  financial
   statements have been prepared in accordance with generally  accepted
   accounting principles for interim financial information and with the
   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
   Accordingly, they do not include all of the information and footnotes
   required  by  generally accepted accounting principles for  complete
   financial  statements. In the opinion of management, these financial
   statements  contain all adjustments, consisting of normal  recurring
   accruals, 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 for
   the  year ended December 31, 2005, as amended on July 17, 2006 (2005
   Form 10-K).

   Cargo  fuel and security surcharge revenues of $40 million  and  $72
   million  for  the three months and six months ended  June  30,  2005
   have been reclassified from Other revenues to Cargo revenues in  the
   consolidated statement of operations to conform to the current  year
   presentation.

2. Under  the  1998  Long  Term Incentive Plan, as  amended  (the  1998
   LTIP),  officers  and key employees of AMR and its subsidiaries  may
   be   granted  stock  options,  stock  appreciation  rights   (SARs),
   restricted  stock,  deferred  stock, stock  purchase  rights,  other
   stock-based  awards  and/or  performance-related  awards,  including
   cash  bonuses.   The  total number of common shares  authorized  for
   distribution  under  the  1998  Long Term  Incentive  Plan  is  23.7
   million  shares (after giving effect to a one-for-one stock dividend
   in  1998 and the dividend of shares of The Sabre Group, Inc.  via  a
   spin-off  in 2000).  The 1998 LTIP, the successor to the  1988  Long
   Term  Incentive Plan (1988 LTIP), will terminate no later  than  May
   21, 2008.

   In  2003,  AMR  established the 2003 Employee Stock  Incentive  Plan
   (the  2003  Plan) to provide, among other things, equity  awards  to
   employees  as  part  of the 2003 restructuring process.   Under  the
   2003  Plan, employees may be granted stock options, restricted stock
   and  deferred stock. As of April 19, 2006, no additional shares were
   available for distribution under the 2003 Plan.

   Options  granted under the 1988 LTIP, 1998 LTIP and  the  2003  Plan
   are  awarded  with an exercise price equal to the fair market  value
   of  the  stock on date of grant, become exercisable in equal  annual
   installments  over periods ranging from two to five years  following
   the  date of grant and expire no later than ten years from the  date
   of  grant.   As of June 30, 2006, approximately 4.6 million  options
   outstanding under the 1998 LTIP and  2003 Plan had not vested.

   Prior  to  January 1, 2006, American accounted for its participation
   in   AMR's   stock-based  compensation  plans  in  accordance   with
   Accounting  Principles Board Opinion No. 25, "Accounting  for  Stock
   Issued  to  Employees" (APB 25) and related Interpretations.   Under
   APB  25,  no  compensation expense was recognized for  stock  option
   grants if the exercise price of AMR's stock option grants was at  or
   above  the fair market value of the underlying stock on the date  of
   grant.   Effective  January 1, 2006, AMR and  American  adopted  the
   fair   value  recognition  provisions  of  Statement  of   Financial
   Accounting   Standards  No.  123(R),  "Share-Based  Payment"   (SFAS
   123(R))  using  the modified-prospective transition  method.   Under
   this   transition  method,  compensation  cost  recognized  in  2006
   includes:  (a)  compensation  cost  for  all  share-based   payments
   granted  prior to, but not yet vested as of January 1,  2006,  based
   on  the grant-date fair value used for pro forma disclosures and (b)
   compensation  cost  for all share-based payments granted  subsequent
   to  January 1, 2006, based on the grant-date fair value estimated in
   accordance  with the provisions of SFAS 123(R).  Results  for  prior
   periods have not been restated.


                                         4






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

   As  a result of adopting SFAS 123(R), American's net income for  the
   three months and six months ended June 30, 2006, was $5 million  and
   $16  million  lower than if it had continued to account  for  share-
   based compensation for stock options under APB 25.

   Prior  to  January  1, 2006, AMR and American had  adopted  the  pro
   forma  disclosure  features  of Statement  of  Financial  Accounting
   Standards  No. 123, "Accounting for Stock-Based Compensation"  (SFAS
   123), as amended by Statement of Financial Accounting Standards  No.
   148,   "Accounting   for  Stock-Based  Compensation-Transition   and
   Disclosure."   The  following table illustrates the  effect  on  net
   earnings   (loss)  if  the  Company  had  applied  the  fair   value
   recognition   provisions  of  SFAS  123  to   stock-based   employee
   compensation (in millions):

                                  Three Months Ended      Six Months Ended
                                      June 30, 2005        June 30, 2005

   Net earnings (loss), as reported         $  41                $(130)
   Add: Stock-based employee
     compensation expense
     included in reported net
     earnings (loss)                           11                   17
   Deduct: Total stock-based
     employee compensation
     expense determined under
     fair value based methods
     for all awards                           (26)                 (48)

   Pro forma net earnings (loss)            $  26                $(161)


   On  March  29, 2006, the AMR Board of Directors amended and restated
   the   2003-2005  Performance  Share  Plan  for  Officers   and   Key
   Employees,  the  2004-2006 Performance Share Plan for  Officers  and
   Key   Employees,  and  the  2004  Agreements  for  Deferred   Shares
   (collectively,  the  Amended Plans).  Before  amendment,  the  plans
   allowed  for  settlement  only in cash.   The  three  Amended  Plans
   permit  settlement in a combination of cash and/or  stock;  however,
   the  amendments  did  not impact the fair value of  the  obligations
   under  the  three Amended Plans.  The Company anticipates using  all
   currently available shares under the 1998 LTIP and the 2003 Plan  to
   satisfy  obligations under the three Amended Plans,  but,  based  on
   current  estimates, a portion of the obligations will be settled  in
   cash.   The Company will account for these obligations prospectively
   as  a  combination  of liability and equity grants.   In  accordance
   with  SFAS  123(R),  the  Company  reclassified  $187  million  from
   Accrued  liabilities  to Additional paid-in  capital  on  March  29,
   2006,  representing  the vested portions of  the  current  estimated
   fair  value of obligations under all three of the Amended Plans that
   are expected to be settled with stock.










                                         5



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

3. As  of June 30, 2006, the Company had commitments to acquire  an
   aggregate of 47 Boeing 737-800s and seven Boeing 777-200ERs in  2013
   through  2016.  Future  payments for  all  aircraft,  including  the
   estimated  amounts for price escalation, will be approximately  $2.8
   billion in 2011 through 2016.

4. Accumulated depreciation of owned equipment and property at June
   30,  2006  and December 31, 2005 was $9.8 billion and $9.4  billion,
   respectively.   Accumulated amortization of equipment  and  property
   under  capital leases was $1.0 billion and $1.1 billion at June  30,
   2006 and December 31, 2005, respectively.

5. As  discussed in Note 8 to the consolidated financial statements
   in the 2005 Form 10-K, the Company has a valuation allowance against
   the full amount of its net deferred tax asset. The Company's deferred
   tax  asset valuation allowance decreased $77 million during the  six
   months ended June 30, 2006 to $1.7 billion as of June 30, 2006.

6. As  of  June  30, 2006, American has issued guarantees  covering
   approximately $1.1 billion of AMR's unsecured debt.  In addition, as
   of  June  30, 2006, AMR and American have issued guarantees covering
   approximately $408 million of AMR Eagle's secured debt.

   On  March  27,  2006, American refinanced its bank credit  facility.
   In  general,  the new credit facility adjusted the amounts  borrowed
   under  the  senior secured revolving credit facility and the  senior
   secured  term  loan facility, reduced the overall interest  rate  on
   the  combined  credit facility and favorably modified  certain  debt
   covenant requirements.


                                         6



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

7. The  following  tables provide the components  of  net  periodic
   benefit cost for the three and six months ended June 30, 2006 and 2005
   (in millions):

                                            Pension Benefits
                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                  2006      2005         2006      2005

  Components of net periodic
   benefit cost

   Service cost                   $ 100     $  93        $ 199     $ 185
   Interest cost                    160       153          321       305
   Expected return on assets       (167)     (164)        (335)     (329)
   Amortization of:
   Prior service cost                 4         4            8         8
   Unrecognized net loss             20        13           40        26

   Net periodic benefit cost      $ 117     $  99        $ 233     $ 195


                                       Other Postretirement Benefits
                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                  2006      2005         2006      2005

  Components of net periodic
   benefit cost

   Service cost                   $  20     $  19        $  38     $  37
   Interest cost                     49        49           96        99
   Expected return on assets         (4)       (4)          (8)       (7)
   Amortization of:
   Prior service cost                (3)       (3)          (5)       (5)
   Unrecognized net loss              -         1            1         1

   Net periodic benefit cost      $  62     $  62        $ 122     $ 125

   The  Company expects to contribute approximately $250 million to its
   defined  benefit pension plans in 2006. The Company's  estimates  of
   its   defined   benefit  pension  plan  contributions  reflect   the
   provisions  of the Pension Funding Equity Act of 2004. Of  the  $250
   million  the  Company expects to contribute to its  defined  benefit
   pension  plans in 2006, the Company contributed $119 million  during
   the  six  months ended June 30, 2006 and contributed $65 million  on
   July 14, 2006.


                                         7



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


8. As  a  result  of  the events of September 11, 2001,  the  depressed
   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  changes  since December 31, 2005 in the remaining accruals  for
   these charges (in millions):

                               Aircraft    Facility
                               Charges    Exit Costs     Total

      Remaining accrual
       at December 31, 2005     $  150      $   36      $  186
      Adjustments                   (5)        (11)        (16)
      Payments                      (9)         (1)        (10)
      Remaining accrual
       at June 30, 2006         $  136      $   24      $  160


   Cash  outlays  related  to  the accruals for  aircraft  charges  and
   facility exit costs will occur through 2017 and 2018, respectively.

9. The  Company  includes  changes  in  the  fair  value  of  certain
   derivative  financial instruments that qualify for hedge accounting,
   changes in minimum pension liabilities and unrealized gains and losses
   on available-for-sale securities in comprehensive income (loss). For
   the  three months ended June 30, 2006 and 2005, comprehensive income
   was $291 million and $52 million, respectively, and for the six months
   ended  June 30, 2006 and 2005, comprehensive income (loss) was  $205
   million and $(74) million, respectively.  The difference between net
   earnings (loss) and comprehensive income (loss) for the three and six
   months ended June 30, 2006 and 2005 is due primarily to the accounting
   for the Company's derivative financial instruments.

   Ineffectiveness  is  inherent in hedging jet  fuel  with  derivative
   positions   based   in  crude  oil  or  other  crude   oil   related
   commodities.   As  required  by Statement  of  Financial  Accounting
   Standard  No.  133,  "Accounting  for  Derivative  Instruments   and
   Hedging Activities", the Company assesses, both at the inception  of
   each  hedge  and on an on-going basis, whether the derivatives  that
   are  used  in  its  hedging  transactions are  highly  effective  in
   offsetting  changes in cash flows of the hedged items.  The  Company
   discontinues hedge accounting prospectively if it determines that  a
   derivative is no longer expected to be highly effective as  a  hedge
   or  if  it  decides to discontinue the hedging relationship.   As  a
   result  of  its  quarterly  effectiveness  assessment,  the  Company
   determined that the majority of its derivatives settling during  the
   remainder  of 2006 and in 2007 are no longer expected to  be  highly
   effective  in  offsetting changes in forecasted jet fuel  purchases.
   As  a  result, effective on July 1, 2006, all subsequent changes  in
   the  fair  value  of  those  particular  hedge  contracts  will   be
   recognized  directly  in  earnings rather  than  being  deferred  in
   Accumulated  other comprehensive loss. On an economic  basis,  these
   derivatives  will  continue to largely offset potential  changes  in
   the  price  of  jet  fuel.  Hedge accounting  will  continue  to  be
   applied  to derivatives used to hedge forecasted jet fuel  purchases
   that are expected to remain highly effective.


                                         8



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

10.On  March  31, 2006, the Financial Accounting Standards  Board
   (FASB)  issued an exposure draft "Employers' Accounting for  Defined
   Benefit  Pension  and Other Postretirement Plans,  an  amendment  of
   FASB  Statements  No.  87,  88,  106,  and  132(R)".   The  proposed
   standard would, among other things, require the Company to:

   - Recognize  the funded status of the Company's defined  benefit
     plans in its consolidated financial statements.

   - Recognize as a component of Other comprehensive income (loss) the
     actuarial gains and losses and the prior service costs and credits
     that arise during the period but are not immediately recognized as
     components of net periodic benefit cost.

   The proposed standard would be effective for fiscal years ending
   after December 15, 2006.  As of December 31, 2005, the required
   adjustment to the Company's balance sheet would increase the
   liability for pension and postretirement benefits and increase
   Accumulated other comprehensive loss by approximately $1.0 billion;
   however, increases in interest rates since December 31, 2005 would
   offset some portion of the required adjustment to the consolidated
   balance sheet.






                                         9



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

Forward-Looking Information

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

Forward-looking  statements are subject to a number  of  factors  that
could cause the Company's actual results to differ materially from the
Company's expectations.  The following factors, in addition  to  other
possible factors not listed, could cause the Company's actual  results
to   differ   materially  from  those  expressed  in   forward-looking
statements:   the  materially  weakened  financial  condition  of  the
Company,  resulting from its significant losses in recent  years;  the
ability   of   the  Company  to  generate  additional   revenues   and
significantly  reduce  its  costs;  changes  in  economic  and   other
conditions  beyond the Company's control, and the volatile results  of
the  Company's operations; the Company's substantial indebtedness  and
other  obligations;  the ability of the Company  to  satisfy  existing
financial  or  other  covenants in certain of its  credit  agreements;
continued high fuel prices and further increases in the price of fuel,
and  the  availability  of  fuel;  the fiercely  competitive  business
environment  faced by the Company, and historically low  fare  levels;
competition with reorganized and reorganizing carriers; the  Company's
reduced  pricing power; the Company's likely need to raise  additional
funds  and  its ability to do so on acceptable terms; changes  in  the
Company's  business strategy; government regulation of  the  Company's
business; conflicts overseas or terrorist attacks; uncertainties  with
respect  to  the  Company's international operations; outbreaks  of  a
disease  (such  as  SARS or avian flu) that affects  travel  behavior;
uncertainties  with  respect  to  the  Company's  relationships   with
unionized  and  other employee work groups; increased insurance  costs
and   potential  reductions  of  available  insurance  coverage;   the
Company's  ability  to  retain  key  management  personnel;  potential
failures  or disruptions of the Company's computer, communications  or
other  technology systems; changes in the price of AMR's common stock;
and  the  ability  of the Company to reach acceptable agreements  with
third  parties.   Additional information concerning  these  and  other
factors   is  contained  in  the  Company's  Securities  and  Exchange
Commission  filings, including but not limited to the  Company's  2005
Form  10-K (see in particular Item 1A "Risk Factors" in the 2005  Form
10-K).

Overview

The  Company recorded net earnings of $280 million during  the  second
quarter of 2006 compared to $41 million in the same period last  year.
The  Company's  second  quarter  2006 results  were  impacted  by  the
continuing increase in fuel prices, offset by an improvement  in  unit
revenues (passenger revenue per available seat mile).

The price of jet fuel increased by 46.1 cents per gallon compared  to
the  second quarter of 2006. This price increase negatively  impacted
fuel  expense  by  $340  million during the  quarter  based  on  fuel
consumption  of  737 million gallons.  Continuing high  fuel  prices,
additional increases in the price of fuel, and/or disruptions in  the
supply of fuel would further adversely affect the Company's financial
condition and its results of operations.



                                         10



Mainline  passenger  unit revenues increased  11.7  percent  for  the
second  quarter  due to a 3.1 point load factor increase  and  a  7.6
percent  increase in passenger yield (passenger revenue per passenger
mile)  compared to the same period in 2005. The load factor  increase
reflects an overall reduction in domestic capacity and an improvement
in economic conditions. Passenger yield showed significant year-over-
year  improvement as the Company has been successful in  implementing
limited fare increases to partially offset the continuing rise in the
cost   of  fuel;  however,  passenger  yield  remains  depressed   by
historical standards.  The Company believes this depressed  passenger
yield  is  due  in  large  part  to a corresponding  decline  in  the
Company's pricing power. The Company's reduced pricing power  is  the
product  of  several factors, including: greater cost sensitivity  on
the  part  of  travelers (particularly business  travelers);  pricing
transparency  resulting  from  the  use  of  the  Internet;   greater
competition  from  low-cost  carriers and  from  carriers  that  have
recently  reorganized  or  are  reorganizing,  including  under   the
protection of Chapter 11 of the U.S. Bankruptcy Code; other  carriers
that  are better hedged against rising fuel costs and able to  better
absorb  the  current high jet fuel prices; and, more  recently,  fare
simplification efforts by certain carriers. The Company believes that
its  reduced  pricing  power will persist indefinitely  and  possibly
permanently.

The  Company's  ability  to become consistently  profitable  and  its
ability to continue to fund its obligations on an ongoing basis  will
depend  on a number of factors, many of which are largely beyond  the
Company's  control.   Some  of  the  risk  factors  that  affect  the
Company's  business  and  financial results  are  referred  to  under
"Forward-Looking  Information" above and are discussed  in  the  Risk
Factors listed in Item 1A (on pages 11-16) in the 2005 Form 10-K.  As
the  Company  seeks  to  improve  its financial  condition,  it  must
continue  to  take  steps  to  generate additional  revenues  and  to
significantly reduce its costs. Although the Company has a number  of
initiatives underway to address its cost and revenue challenges,  the
ultimate  success of these initiatives is not known at this time  and
cannot  be  assured.   It  will be very difficult,  absent  continued
restructuring of its operations, for the Company to continue to  fund
its  obligations  on  an  ongoing basis, or  to  become  consistently
profitable,  if  the  overall industry revenue environment  does  not
continue  to  improve  and fuel prices remain  at  historically  high
levels for an extended period.

On  June  15,  2006, the cities of Dallas and Fort Worth,  Texas,  DFW
International  Airport, Southwest Airlines, and the Company  announced
an  agreement  in  principle  to modify the  Wright  Amendment,  which
authorizes  certain  flight operations at  Dallas  Love  Field  within
limited  geographic  areas.   Southwest  Airlines  had  been  actively
seeking  repeal of the Wright Amendment, with the goal of  eliminating
the  geographic  restrictions on operations at  Love  Field,  and  the
Company  had opposed those efforts.  The initial agreement  was  later
reduced  to a contract among the five parties, which became  finalized
and  effective  on June 29, 2006.  Among other things,  the  agreement
eventually  eliminates  geographic restrictions  on  operations  while
limiting  the  maximum  number of gates at Love  Field.   The  Company
believes the proposed modifications are a pragmatic resolution of  the
issues  related  to the Wright Amendment and the use  of  Love  Field.
Because  the Wright Amendment is a federal law, Congress must  approve
legislation for the proposed changes to be enacted.


                                         11



LIQUIDITY AND CAPITAL RESOURCES

Significant Indebtedness and Future Financing

The  Company  remains heavily indebted and has significant obligations
(including substantial pension funding obligations), as described more
fully under Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the 2005 Form 10-K.  As of the
date of this Form 10-Q, the Company believes it should have sufficient
liquidity to fund its operations for the foreseeable future, including
repayment  of debt and capital leases, capital expenditures and  other
contractual obligations. However, to maintain sufficient liquidity  as
the   Company  continues  to  implement  its  restructuring  and  cost
reduction  initiatives, and because the Company has significant  debt,
lease  and  other obligations in the next several years,  as  well  as
substantial pension funding obligations, the Company will likely  need
access to additional funding. The Company's possible financing sources
primarily include: (i) a limited amount of additional secured aircraft
debt (a very large majority of the Company's owned aircraft, including
virtually  all  of the Company's Section 1110-eligible  aircraft,  are
encumbered)  or sale-leaseback transactions involving owned  aircraft;
(ii)  debt  secured by new aircraft deliveries; (iii) debt secured  by
other  assets;  (iv) securitization of future operating receipts;  (v)
the  sale or monetization of certain assets; and (vi) unsecured  debt.
However, the availability and level of these financing sources  cannot
be  assured,  particularly in light of the Company's recent  financial
results,  substantial indebtedness, reduced credit ratings, high  fuel
prices,  historically  weak  revenues and the  financial  difficulties
being  experienced  in  the airline industry.  The  inability  of  the
Company to obtain any necessary funding on acceptable terms would have
a material adverse impact on the ability of the Company to sustain its
operations over the long-term.

The  Company's  substantial indebtedness and other  obligations  could
have  important consequences.  For example, they could: (i) limit  the
Company's ability to obtain additional financing for working  capital,
capital expenditures, acquisitions and general corporate purposes,  or
adversely  affect the terms on which such financing could be obtained;
(ii) require the Company to dedicate a substantial portion of its cash
flow  from  operations  to  payments on  its  indebtedness  and  other
obligations, thereby reducing the funds available for other  purposes;
(iii)  make  the  Company more vulnerable to economic downturns;  (iv)
limit  its  ability to withstand competitive pressures and reduce  its
flexibility   in   responding  to  changing  business   and   economic
conditions;  and (v) limit the Company's flexibility in planning  for,
or  reacting to, changes in its business and the industry in which  it
operates.

Credit Facility Covenants

American has a credit facility (the Credit Facility) consisting  of  a
fully drawn $315 million senior secured revolving credit facility with
a  final maturity on June 17, 2009 and a fully drawn $447 million term
loan  facility with a final maturity on December 17, 2010. The  Credit
Facility  contains  a  covenant  (the  Liquidity  Covenant)  requiring
American  to  maintain,  as defined, unrestricted  cash,  unencumbered
short  term  investments  and  amounts  available  for  drawing  under
committed  revolving credit facilities of not less than $1.25  billion
for each quarterly period through the life of the Credit Facility.  In
addition,  the  Credit  Facility  contains  a  covenant  (the  EBITDAR
Covenant)  requiring AMR to maintain a ratio of cash flow (defined  as
consolidated  net  income, before interest expense  (less  capitalized
interest),  income taxes, depreciation and amortization  and  rentals,
adjusted  for  certain gains or losses and non-cash  items)  to  fixed
charges  (comprising interest expense (less capitalized interest)  and
rentals).   The required ratio was 1.00 to 1.00 for the  four  quarter
period  ending June 30, 2006 and will increase gradually  to  1.50  to
1.00  for  the four quarter period ending June 30, 2009 and  for  each
four quarter period ending on each fiscal quarter thereafter. AMR  and
American  were  in  compliance with the  Liquidity  Covenant  and  the
EBITDAR covenant as of June 30, 2006 and expect to be able to continue
to  comply with these covenants.  However, given the historically high
price  of fuel and the volatility of fuel prices and revenues,  it  is
difficult to assess whether AMR and American will, in fact, be able to
continue to comply with the Liquidity Covenant and, in particular, the
EBITDAR  Covenant, and there are no assurances that AMR  and  American
will  be able to comply with these covenants.  Failure to comply  with
these  covenants  would result in a default under the Credit  Facility
which - - if the Company did not take steps to obtain a waiver of,  or
otherwise mitigate, the default - - could result in a default under  a
significant  amount of the Company's other debt and lease  obligations
and otherwise adversely affect the Company.


                                         12



Pension Funding Obligation

The  Company expects to contribute approximately $250 million  to  its
defined benefit pension plans in 2006. The Company's estimates of  its
defined  benefit pension plan contributions reflect the provisions  of
the  Pension  Funding  Equity Act of 2004. Of  the  $250  million  the
Company expects to contribute to its defined benefit pension plans  in
2006, the Company contributed $119 million during the six months ended
June 30, 2006 and contributed $65 million on July 14, 2006.

Under  Generally Accepted Accounting Principles, the Company's defined
benefit plans were underfunded as of December 31, 2005 by $3.2 billion
based  on  the Projected Benefit Obligation (PBO) and by $2.3  billion
based on the Accumulated Benefit Obligation (ABO) (refer to Note 10 to
the  consolidated financial statements in the 2005  Form  10-K).   The
Company's  funded  status  at December 31,  2005  under  the  relevant
Government funding standard is similar to its funded status using  the
ABO   methodology.    Due   to  uncertainties  regarding   significant
assumptions  involved in estimating future required  contributions  to
its  defined benefit pension plans, such as interest rate levels,  the
amount and timing of asset returns, and, in particular, the impact  of
proposed  legislation currently pending the reconciliation process  of
the  U.S. Congress, the Company is not able to reasonably estimate its
future required contributions beyond 2006. However, absent significant
legislative  relief  or  significant  favorable  changes   in   market
conditions, or both, the Company could be required to fund in  2007  a
majority  of  the  underfunded balance under the  relevant  Government
funding standard.  Even with significant legislative relief (including
proposed airline-specific relief), the Company's 2007 required minimum
contributions  are  expected  to be higher  than  the  Company's  2006
contributions.

Cash Flow Activity

At  June 30, 2006, the Company had $5.1 billion in unrestricted  cash
and short-term investments, an increase of $1.3 billion from December
31,  2005.   Net  cash provided by operating activities  in  the  six
months  ended  June 30, 2006 was $1.5 billion, an  increase  of  $534
million over the same period in 2005 primarily due to an increase  in
the   Air   traffic   liability  resulting  from  improved   economic
conditions.  The  Company contributed $119  million  to  its  defined
benefit  pension  plans in the first six months of 2006  compared  to
$213 million during the first six months of 2005.

Capital  expenditures  for the first six months  of  2006  were  $238
million  and  primarily included the acquisition of two  Boeing  777-
200ER  aircraft  and the cost of improvements at New York's  John  F.
Kennedy   airport   (JFK).   Substantially  all  of   the   Company's
construction  costs  at  JFK  will  be  reimbursed  through  a   fund
established from a previous financing transaction.


                                         13



RESULTS OF OPERATIONS

For the Six Months Ended June 30, 2006 and 2005

Revenues

The  Company's revenues increased approximately $1.3 billion, or 12.5
percent, to $11.3 billion for the six months ended June 30, 2006 from
the  same  period last year.  American's passenger revenues increased
by  10.6  percent,  or $858 million, while capacity  (available  seat
mile)  (ASM)  decreased  by 0.6 percent.  American's  passenger  load
factor  increased  2.5 points to 80.0 percent and  passenger  revenue
yield  per  passenger mile increased by 7.8 percent to  12.83  cents.
This  resulted  in  an increase in American's passenger  revenue  per
available  seat mile (RASM) of 11.3 percent to 10.26 cents. Following
is   additional   information  regarding  American's   domestic   and
international RASM and capacity based on geographic areas defined  by
the Department of Transportation (DOT):

                            Six Months Ended June 30, 2006
                         RASM      Y-O-Y        ASMs        Y-O-Y
                        (cents)    Change     (billions)   Change

   DOT Domestic          10.40      13.3%       56.1        (2.8)%
   International         10.02       7.6        31.3         3.7
     DOT Latin America   10.50      14.1        15.0        (2.7)
     DOT Atlantic        10.09       3.3        12.2         6.4
     DOT Pacific          8.03      (2.5)        4.1        24.2

Regional  Affiliates  include  two  AMR  wholly  owned  subsidiaries,
American   Eagle   Airlines,  Inc.  and  Executive   Airlines,   Inc.
(collectively,  AMR Eagle), and two independent carriers  with  which
American  has  capacity purchase agreements, Trans  States  Airlines,
Inc. (Trans States) and Chautauqua Airlines, Inc. (Chautauqua).

Regional  Affiliates' passenger revenues, which are based on industry
standard  proration  agreements for flights  connecting  to  American
flights, increased $259 million, or 25.6 percent, to $1.3 billion  as
a  result  of  increased capacity, load factors and passenger  yield.
Regional  Affiliates' traffic increased 17.6 percent to  4.9  billion
revenue  passenger miles (RPMs), while capacity increased 9.3 percent
to  6.7  billion  ASMs,  resulting in a 5.3  point  increase  in  the
passenger load factor to 73.9 percent.

Cargo  revenues increased 3.2 percent, or $12 million, to $392 million
as  a result of a $20 million increase in fuel surcharges offset by  a
1.4 percent decrease in cargo ton miles.

Other  revenues  increased  23.2 percent, or  $124  million,  to  $659
million  due  in  part to increased third-party maintenance  contracts
obtained  by  the  Company's  maintenance and  engineering  group  and
increases in certain passenger fees.


                                         14



Operating Expenses

The  Company's total operating expenses increased 9.0 percent, or $890
million,  to  $10.8  billion for the six months ended  June  30,  2006
compared  to  the same period in 2005.  American's mainline  operating
expenses  per ASM in the six months ended June 30, 2006 increased  9.3
percent  compared  to the same period in 2005 to  10.84  cents.  These
increases  are due primarily to a 32.8 percent increase in  American's
price  per  gallon of fuel in the first half of 2006 relative  to  the
same period in 2005, including the impact of a $55 million fuel excise
tax refund received in March 2005.



    (in millions)                  Six Months
                                      Ended          Change    Percentage
   Operating Expenses             June 30,2006     from 2005    Change


   Wages, salaries and benefits     $  3,103        $   73       2.4%
   Aircraft fuel                       2,876           656      29.5    (a)
   Regional payments to AMR Eagle      1,086           103      10.5    (b)
   Other rentals and landing fees        586            24       4.3
   Commissions, booking fees
     and credit card expense             555            (2)     (0.4)
   Depreciation and amortization         483            (2)     (0.4)
   Maintenance, materials
     and repairs                         374           (28)     (7.0)
   Aircraft rentals                      285            (1)     (0.3)
   Food service                          251             3       1.2
   Other operating expenses            1,215            64       5.6
     Total operating expenses       $ 10,814        $  890       9.0%

  (a)  Aircraft fuel expense increased primarily due to a 32.8 percent
       increase in American's price per gallon of fuel (including the benefit
       of a $55 million fuel excise tax refund received in March 2005 and the
       impact of fuel hedging) offset by a 2.4 percent decrease in American's
       fuel consumption.
  (b)  Regional payment to AMR Eagle increased primarily as a result of
       increased capacity and fuel costs.

Other Income (Expense)

Other  income  (expense), historically a net  expense,  increased  $59
million  due  primarily to a decrease in interest capitalized  of  $32
million due to the capitalization of certain construction costs at JFK
in  2005.  Both interest income and interest expense increased  during
2006  versus  2005.  Interest income increased  due  to  increases  in
interest  rates and cash and short-term investment balances.  Interest
expense increased due to an increase in interest rates.


Income Tax

The  Company  did not record a net tax provision (benefit)  associated
with  its  earnings (loss) for the six months ended June 30, 2006  and
2005  due to the Company providing a valuation allowance, as discussed
in Note 5 to the condensed consolidated financial statements.


                                         15





Regional Affiliates

The following table summarizes the combined capacity purchase activity
for  the American Connection carriers and AMR Eagle for the six months
ended June 30, 2006 and 2005 (in millions):

                                             Six Months Ended
                                                 June 30,
                                             2006        2005
       Revenues:
       Regional Affiliates                   $1,271      $1,012
       Other                                     50          43
                                             $1,321      $1,055

       Expenses:
       Payment to Regional Affiliates        $1,184      $1,073
       Other incurred expenses                  159         137
                                             $1,343      $1,210

In addition, passengers connecting to American's flights from American
Connection  and  AMR  Eagle flights generated passenger  revenues  for
American  flights of $867 million and $744 million for the six  months
ended  June  30,  2006 and 2005, respectively, which are  included  in
Revenues - Passenger in the consolidated statements of operations.

Outlook

The  Company currently expects third quarter 2006 mainline unit  costs
to  increase  nearly  seven percent year over year.   Full  year  2006
mainline unit costs are also expected to increase approximately  seven
percent versus 2005.

Capacity for American's mainline jet operations is expected to decline
more  than  two percent in the third quarter of 2006 compared  to  the
third  quarter  of  2005.   Mainline capacity is expected  to  decline
approximately one percent in the full year 2006 compared to 2005.


                                         16



Item 3.  Quantitative and Qualitative Disclosures about Market Risk

There  have  been  no  material  changes  in  market  risk  from   the
information   provided  in  Item  7A.  Quantitative  and   Qualitative
Disclosures  About Market Risk of the Company's 2005 Form  10-K.   The
change  in  market  risk  for aircraft fuel  is  discussed  below  for
informational  purposes  due  to  the  sensitivity  of  the  Company's
financial results to changes in fuel prices.

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

Aircraft Fuel   The Company's earnings are affected by changes in  the
price  and  availability of aircraft fuel.   In  order  to  provide  a
measure of control over price and supply, the Company trades and ships
fuel  and  maintains  fuel storage facilities to  support  its  flight
operations.   The Company also manages the price risk  of  fuel  costs
primarily  by  using  jet fuel, heating oil,  and  crude  oil  hedging
contracts.   Market  risk  is estimated as a hypothetical  10  percent
increase  in  the  June 30, 2006 cost per gallon of  fuel.   Based  on
projected  2006  and 2007 fuel usage through June 30,  2007,  such  an
increase  would  result  in an increase to aircraft  fuel  expense  of
approximately $489 million in the twelve months ended June  30,  2007,
inclusive of the impact of fuel hedge instruments outstanding at  June
30, 2006.  Comparatively, based on projected 2006 fuel usage, such  an
increase  would have resulted in an increase to aircraft fuel  expense
of  approximately $477 million in the twelve months ended December 31,
2006, inclusive of the impact of fuel hedge instruments outstanding at
December 31, 2005.  The change in market risk is primarily due to  the
increase in fuel prices.

Ineffectiveness  is  inherent  in hedging  jet  fuel  with  derivative
positions  based in crude oil or other crude oil related  commodities.
As  required  by Statement of Financial Accounting Standard  No.  133,
"Accounting  for  Derivative Instruments and Hedging Activities",  the
Company  assesses, both at the inception of each hedge and on  an  on-
going  basis,  whether the derivatives that are used  in  its  hedging
transactions are highly effective in offsetting changes in cash  flows
of  the  hedged  items.  The  Company  discontinues  hedge  accounting
prospectively if it determines that a derivative is no longer expected
to  be highly effective as a hedge or if it decides to discontinue the
hedging  relationship.   As  a result of its  quarterly  effectiveness
assessment,  the Company determined that more than 65 percent  of  its
derivatives,  based on market value, settling during the remainder  of
2006  and  in  2007 are no longer expected to be highly  effective  in
offsetting  changes in forecasted jet fuel purchases.   As  a  result,
effective on July 1, 2006, all subsequent changes in the fair value of
those  particular  hedge  contracts will  be  recognized  directly  in
earnings rather than being deferred in Accumulated other comprehensive
loss. On an economic basis, these derivatives will continue to largely
offset  potential changes in the price of jet fuel.  Hedge  accounting
will  continue  to be applied to derivatives used to hedge  forecasted
jet fuel purchases that are expected to remain highly effective.

As  of  June  30,  2006, the Company had effective  hedges,  including
option contracts and collars, covering approximately 34 percent of its
estimated remaining 2006 fuel requirements and an insignificant amount
of its estimated fuel requirements thereafter.  The consumption hedged
for  the  remainder  of  2006  is  capped  at  an  average  price   of
approximately  $66  per barrel of crude oil. As discussed  above,  the
majority   of  these  contracts  were  determined  to  be  ineffective
beginning  July  1, 2006.  A deterioration of the Company's  financial
position  could negatively affect the Company's ability to hedge  fuel
in the future.


                                         17



Item 4.  Controls and Procedures

The term "disclosure controls and procedures" is defined in Rules 13a-
15(e)  and  15d-15(e) of the Securities Exchange Act of 1934,  or  the
Exchange  Act.  This term refers to the controls and procedures  of  a
company  that are designed to ensure that information required  to  be
disclosed by a company in the reports that it files under the Exchange
Act  is  recorded, processed, summarized and reported within the  time
periods  specified  by  the  Securities and  Exchange  Commission.  An
evaluation   was  performed  under  the  supervision  and   with   the
participation  of  the  Company's  management,  including  the   Chief
Executive  Officer  (CEO) and Chief Financial Officer  (CFO),  of  the
effectiveness  of the Company's disclosure controls and procedures  as
of June 30, 2006.  Based on that evaluation, the Company's management,
including  the  CEO  and CFO, concluded that the Company's  disclosure
controls and procedures were effective as of June 30, 2006. During the
quarter  ending on June 30, 2006, there was no change in the Company's
internal   control  over  financial  reporting  that  has   materially
affected,  or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


                                         18



PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings

On  July  26, 1999, a class action lawsuit was filed, and in  November
1999 an amended complaint was filed, against AMR, American, AMR Eagle,
Airlines Reporting Corporation, and the Sabre Group Holdings, Inc.  in
the  United  States  District  Court  for  the  Central  District   of
California,  Western  Division (Westways World  Travel,  Inc.  v.  AMR
Corp., et al.).  The lawsuit alleges that requiring travel agencies to
pay  debit  memos to American for violations of American's fare  rules
(by  customers  of  the agencies):  (1) breaches the  Agent  Reporting
Agreement   between  American  and  AMR  Eagle  and  the   plaintiffs;
(2)  constitutes  unjust  enrichment; and (3) violates  the  Racketeer
Influenced and Corrupt Organizations Act of 1970 (RICO).  On  July  9,
2003,  the  court certified a class that included all travel  agencies
who  have been or will be required to pay money to American for  debit
memos  for  fare rules violations from July 26, 1995 to  the  present.
The  plaintiffs sought to enjoin American from enforcing  the  pricing
rules  in  question and to recover the amounts paid for  debit  memos,
plus treble damages, attorneys' fees, and costs. On February 24, 2005,
the   court  decertified  the  class.   The  claims  against  Airlines
Reporting Corporation have been dismissed, and in September 2005,  the
Court  granted Summary Judgment in favor of the Company and all  other
defendants.   Plaintiffs have filed an appeal  to  the  United  States
Court of Appeals for the Ninth Circuit.  Although the Company believes
that  the  litigation is without merit, a final adverse court decision
could  impose restrictions on the Company's relationships with  travel
agencies, which could have a material adverse impact on the Company.

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

On  August  19, 2002, a class action lawsuit seeking monetary  damages
was  filed, and on May 7, 2003, an amended complaint was filed in  the
United  States District Court for the Southern District  of  New  York
(Power Travel International, Inc. v. American Airlines, Inc., et  al.)
against  American,  Continental  Airlines,  Delta  Air  Lines,  United
Airlines, and Northwest Airlines, alleging that American and the other
defendants breached their contracts with the agency and were  unjustly
enriched  when  these  carriers at various times  reduced  their  base
commissions to zero.  The as yet uncertified class includes all travel
agencies accredited by the Airlines Reporting Corporation "whose  base
commissions on airline tickets were unilaterally reduced to  zero  by"
the  defendants.   The  claims  against  Delta  Air  Lines  have  been
dismissed, and the case is stayed as to United Airlines and  Northwest
Airlines  since  they  filed for bankruptcy.  On  April  19,  2006,  a
stipulation  was  filed  dismissing American  from  the  lawsuit  with
prejudice.


                                         19



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

Four  cases  (each being a purported class action) were filed  against
American  arising from the disclosure of passenger name records  by  a
vendor  of  American.  The cases are:  Kimmell v. AMR, et al.  (U.  S.
District Court, Texas), Baldwin v. AMR, et al. (U. S. District  Court,
Texas), Rosenberg v. AMR, et al. (U. S. District Court, New York)  and
Anapolsky v. AMR, et al. (U.S. District Court, New York).  The Kimmell
suit  was  filed in April 2004. The Baldwin and Rosenberg  cases  were
filed  in  May  2004. The Anapolsky suit was filed in September  2004.
The  suits allege various causes of action, including but not  limited
to, violations of the Electronic Communications Privacy Act, negligent
misrepresentation, breach of contract and violation of alleged  common
law rights of privacy.  In each case plaintiffs seek statutory damages
of  $1000 per passenger, plus additional unspecified monetary damages.
The  Court  dismissed the cases but allowed leave to  amend,  and  the
plaintiffs in the Kimmell and Rosenberg cases filed amended complaints
on   June  24,  2005.   The  Kimmell  and  Rosenberg  plaintiffs  have
voluntarily dismissed with prejudice the remaining claims  and  waived
their right to appeal on all issues.

American is defending an appeal of a lawsuit, filed as a class  action
but not certified as such, arising from allegedly improper failure  to
refund certain governmental taxes and fees collected by American  upon
the  sale of nonrefundable tickets when such tickets are not used  for
travel.   In  Harrington  v. Delta Air Lines,  Inc.,  et  al.,  (filed
November 24, 2004 in the United States District Court for the District
of  Massachusetts), the plaintiffs sought unspecified  actual  damages
(trebled),   declaratory  judgment,  injunctive  relief,  costs,   and
attorneys'  fees.   The  suit  asserted  various  causes  of   action,
including  breach  of  contract,  conversion,  and  unjust  enrichment
against American and numerous other airline defendants. The defendants
filed a motion to dismiss which was granted.  Plaintiffs have filed  a
notice of appeal with the First Circuit Court of Appeals.  American is
vigorously  defending the suit and believes it to  be  without  merit.
However,  a final adverse court decision requiring American to  refund
collected  taxes and/or fees could have a material adverse  impact  on
the   Company.  Additionally,  the  same  attorneys  representing  the
Harrington  plaintiffs  filed a qui tam suit  entitled  Teitelbaum  v.
Alaska  Airlines, et al. in the United States District Court  for  the
District  of  Massachusetts.  American was  notified  that  it  was  a
defendant  in  this  case  in  December  2005.   This  case   asserted
essentially  the same claims as in the Harrington case,  and  asserted
that the United States had been damaged and requested essentially  the
same relief on behalf of the United States.  The Teitelbaum plaintiffs
have voluntarily dismissed the case.

On  March  11,  2004, a patent infringement lawsuit was filed  against
AMR,  American, AMR Eagle Holding Corporation, and American  Eagle  in
the  United  States District Court for the Eastern District  of  Texas
(IAP  Intermodal,  L.L.C.  v.  AMR  Corp.,  et  al.).  The  case   was
consolidated  with eight similar lawsuits filed against  a  number  of
other unaffiliated airlines, including Continental, Northwest, British
Airways,  Air  France,  Pinnacle Airlines, Korean  Air  and  Singapore
Airlines  (as  well as various regional affiliates of the  foregoing).
The  plaintiff  alleges  that the airline  defendants  infringe  three
patents,  each  of  which relates to a system of  scheduling  vehicles
based  on freight and passenger transportation requests received  from
remote  computer terminals.  The plaintiff is seeking past and  future
royalties  of over $30 billion dollars, injunctive relief,  costs  and
attorneys'  fees. On September 7, 2005, the court issued a  memorandum
opinion that interpreted disputed terms in the patents.  The plaintiff
dismissed  its  claims without prejudice to its right  to  appeal  the
September  7,  2005  opinion, and the plaintiff is  pursuing  such  an
appeal. Although the Company believes that the plaintiff's claims  are
without merit and is vigorously defending the lawsuit, a final adverse
court  decision awarding substantial money damages or placing material
restrictions  on existing scheduling practices would have  a  material
adverse impact on the Company.


                                         20



On  July  12,  2004, a consolidated class action complaint,  that  was
subsequently amended on November 30, 2004, was filed against  American
and  the  Association  of Professional Flight Attendants  (APFA),  the
Union  which  represents  the  Company's  flight  attendants  (Ann  M.
Marcoux,  et  al.,  v. American Airlines Inc., et al.  in  the  United
States  District Court for the Eastern District of New York). While  a
class  has not yet been certified, the lawsuit seeks on behalf of  all
of  American's flight attendants or various subclasses to  set  aside,
and  to  obtain  damages  allegedly resulting  from,  the  April  2003
Collective  Bargaining  Agreement referred  to  as  the  Restructuring
Participation  Agreement  (RPA).  The  RPA  was  one  of  three  labor
agreements the Company successfully reached with its unions  in  order
to  avoid  filing for bankruptcy in 2003.  In a related  case  (Sherry
Cooper, et al. v. TWA Airlines, LLC, et al., also in the United States
District Court for the Eastern District of New York), the court denied
a preliminary injunction against implementation of the RPA on June 30,
2003.  The  Marcoux suit alleges various claims against the Union  and
American relating to the RPA and the ratification vote on the  RPA  by
individual Union members, including: violation of the Labor Management
Reporting  and Disclosure Act (LMRDA) and the APFA's Constitution  and
By-laws, violation by the Union of its duty of fair representation  to
its  members,  violation by the Company of provisions of  the  Railway
Labor  Act  (RLA) through improper coercion of flight attendants  into
voting or changing their vote for ratification, and violations of  the
Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO).  On
March 28, 2006, the district court dismissed all of various state  law
claims  against  the Company, all but one of the LMRDA claims  against
the  APFA,  and   the  claimed violations of RICO.   This  leaves  the
claimed  violations  of  the RLA and the duty of  fair  representation
against the Company and the APFA (as well as one  LMRDA claim and  one
claim  against  the  APFA  of  a breach of  the  union  constitution).
Although the Company believes the case against it is without merit and
both the Company and the Union are vigorously defending the lawsuit, a
final  adverse  court  decision  invalidating  the  RPA  and  awarding
substantial money damages would have a material adverse impact on  the
Company.

On  February  14,  2006, the Antitrust Division of the  United  States
Department of Justice (the "DOJ") served the Company with a grand jury
subpoena  as  part of an ongoing investigation into possible  criminal
violations  of the antitrust laws by certain domestic and foreign  air
cargo  carriers. At this time, the Company does not believe  it  is  a
target  of the DOJ investigation.  The New Zealand Commerce Commission
notified   the  Company  on  February  17,  2006  that  it   is   also
investigating  whether the Company and certain  other  cargo  carriers
entered   into  agreements  relating  to  fuel  surcharges,   security
surcharges, war risk surcharges, and customs clearance surcharges.  On
February  22,  2006,  the Company received a  letter  from  the  Swiss
Competition  Commission  informing  the  Company  that   it   too   is
investigating  whether the Company and certain  other  cargo  carriers
entered   into  agreements  relating  to  fuel  surcharges,   security
surcharges,  war  risk  surcharges, and customs clearance  surcharges.
The  Company intends to cooperate fully with these investigations.  In
the  event  that these investigations uncover violations of  the  U.S.
antitrust  laws  or  the competition laws of some other  jurisdiction,
such  findings  and related legal proceedings could  have  a  material
adverse impact on the Company.


                                         21



Approximately 38 purported class action lawsuits (Animal Land, Inc. v.
Air  Canada et al. filed in the United States District Court  for  the
Eastern  District  of  New York on February 17, 2006;  Joan  Adams  v.
British  Airways et al. filed in the United States District Court  for
the   Eastern  District  of  New  York  on  February  22,  2006;  Rock
International  Transport  v. Air Canada et al.  filed  in  the  United
States District Court for the Eastern District of New York on February
24,  2006; Helen's Wooden Crafting Co. v. Air Canada et al.  filed  in
the  United States District Court for the Eastern District of New York
on  February 24, 2006; ABM Int'l, Inc. v. Ace Aviation Holdings,  Inc.
et  al.  filed  in  the United States District Court for  the  Eastern
District  of  New York on February 28, 2006; Blumex USA, Inc.  v.  Air
Canada  et  al.  filed  in the United States District  Court  for  the
Northern District of Illinois on March 1, 2006; Mamlaka Video  v.  Air
Canada  et  al.  filed  in the United States District  Court  for  the
Eastern District of New York on March 3, 2006; Spraying Systems Co. v.
ACE Aviation Holdings, Inc. et al. filed in the United States District
Court  for the Eastern District of New York on March 3, 2006; Mitchell
Spitz  v.  Air  France-KLM et al. filed in the United States  District
Court  for  the  Eastern District of New York on March  6,  2006;  JCK
Industries,  Inc. v. British Airways, PLC et al. filed in  the  United
States District Court for the Eastern District of New York on March 6,
2006;  Marc  Seligman v. Air Canada et al. filed in the United  States
District Court for the Southern District of Florida on March 6,  2006;
CID  Marketing and Promotion Inc. v. AMR Corporation et al.  filed  in
the  United  States  District  Court  for  the  Eastern  District   of
Pennsylvania on March 7, 2006; Lynn Culver v. Air Canada et al.  filed
in  the  United States District Court for the District of Columbia  on
March 8, 2006; JSL Carpet Corp. v. ACE Aviation Holdings, Inc. et  al.
filed in the United States District Court for the Eastern District  of
New  York  on March 10, 2006; Y. Hata & Co, Ltd. v. Air France-KLM  et
al.  filed  in  the  United States District  Court  for  the  Northern
District of California on March 13, 2006; FTS International Express v.
ACE Aviation Holdings, Inc. et al. filed in the United States District
Court  for the District of Columbia on March 15, 2006; Thule, Inc.  v.
Air  Canada et al. filed in the United States District Court  for  the
Eastern  District of New York on March 28, 2006; Rosetti Handbags  and
Accessories, Ltd. v. Air France ADS et al. filed in the United  States
District Court for the Eastern District of New York on March 31, 2006;
W.I.T.  Entertainment Inc. v. AMR Corporation  et  al.  filed  in  the
United  States District Court for the Southern District of Florida  on
April  3, 2006; Jeff Rapps v. British Airways PLC et al. filed in  the
United  States District Court for the Eastern District of New York  on
April  7,  2006;  Funke Design Build, Inc. v. AMR Corporation  et  al.
filed in the United States District Court for the Northern District of
Illinois on April 7, 2006; Sul-American Export Inc. v. Air France  ADS
et  al.  filed  in  the United States District Court for  the  Eastern
District  of  New  York on April 7, 2006; La Regale  Ltd.  v.  British
Airways  PLC et al. filed in the United States District Court for  the
Eastern District of New York on April 12, 2006; J.A. Transport Inc. v.
ACE Aviation Holdings, Inc. et al. filed in the United States District
Court  for  the  District of Columbia on April 12,  2006;  Caribe  Air
Cargo,  Inc. v. ACE Aviation Holdings, Inc. et al. filed in the United
States District Court for the District of Columbia on April 13,  2006;
Gold  Eye  Distributors, Inc. v. Air France ADS et al.  filed  in  the
United  States District Court for the Eastern District of New York  on
April  14, 2006; Ralph Olarte v. British Airways PLC et al.  filed  in
the United States District Court for the District of Columbia on April
19, 2006; Capogiro LLC v. ACE Aviation Holdings, Inc. et al. filed  in
the United States District Court for the District of Columbia on April
20, 2006; Ali Fayazi v. British Airways PLC et al. filed in the United
States  District Court for the Eastern District of New York  on  April
26,  2006; Janice Perlman v. British Airways PLC et al. filed  in  the
United  States District Court for the Eastern District of New York  on
May  9, 2006; Leslie Young v. British Airways PLC et al. filed in  the
United  States District Court for the Eastern District of New York  on
May  12, 2006; Craig Antell, M.D. v. British Airways PLC et al.  filed
in  the  United States District Court for the Eastern District of  New
York  on May 16, 2006; Eurotrendz v. British Airways PLC et al.  filed
in  the  United States District Court for the Eastern District of  New
York on May 18, 2006; David Asher Rakoff v. British Airways PLC et al.
filed in the United States District Court for the Eastern District  of
New  York on May 22, 2006; Kalla Hirschbein v. British Airways PLC  et
al. filed in the United States District Court for the Eastern District
of New York on June 1, 2006; Association des Utilisateurs du Transport
de  Fret  v.  ACE Aviation Holdings, Inc. et al. filed in  the  United
States  District Court for the District of Columbia on June  6,  2006;
and  McDuffee  New York, Inc. v. ACE Aviation Holdings,  Inc.  et  al.
filed in the United States District Court for the Northern District of
Illinois  on  June 27, 2006) have been filed against the  Company  and
certain foreign and domestic air carriers alleging that the defendants
violated U.S. antitrust laws by illegally conspiring to set prices and
surcharges on cargo shipments.  These cases have been consolidated  in
the United States District Court for the Eastern District of New York,
together  with approximately 46 other class action lawsuits  in  which
the Company has not been named as a defendant.  Plaintiffs are seeking
trebled  money damages and injunctive relief. American will vigorously
defend  these  lawsuits; however, any adverse judgment  could  have  a
material adverse impact on the Company.

On June 20, 2006, DOJ served the Company with a grand jury subpoena as
part of an ongoing investigation into possible criminal violations  of
the antitrust laws by certain domestic and foreign passenger carriers.
At  this time, the Company does not believe it is a target of the  DOJ
investigation.   The  Company intends to  cooperate  fully  with  this
investigation.   In  the  event  that  these  investigations   uncover
violations of the U.S. antitrust laws or the competition laws of  some
other  jurisdiction, such findings and related legal proceedings could
have a material adverse impact on the Company.



                                         22



Approximately 17 purported class action lawsuits (Saldana v.  American
Airlines,  Inc. et al. filed in the United States District  Court  for
the  Southern District of New York on June 23, 2006; McGovern  v.  AMR
Corporation, et al. filed in the United States District Court for  the
Northern  District of Illinois on June 23, 2006; Baharani  v.  British
Airways  PLC et al. filed in the United States District Court for  the
Southern  District  of Florida on June 23, 2006;  Boccara  v.  British
Airways  PLC et al. filed in the United States District Court for  the
Northern District of Florida on June 23, 2006; Chin v. AMR Corporation
et  al.  filed  in the United States District Court for  the  Northern
District of Illinois on June 26, 2006; McDuffee New York, Inc. v.  ACE
Aviation  Holdings,  Inc. et al. filed in the United  States  District
Court  for the Northern District of Illinois on June 27, 2006; McGrath
v.  AMR  Corporation et al. filed in the United States District  Court
for  the Northern District of Illinois on June 27, 2006; Fadden v. AMR
Corporation et al. filed in the United States District Court  for  the
Northern  District  of  Illinois on June 28, 2006;  Szeleqski  v.  AMR
Corporation et al. filed in the United States District Court  for  the
Northern  District  of  Illinois  on  June  28,  2006;  Golin  v.  AMR
Corporation et al. filed in the United States District Court  for  the
Northern  District  of California on June 29, 2006;  Mazzocco  v.  AMR
Corporation et al. filed in the United States District Court  for  the
Eastern District of New York on June 29, 2006; McIntyre Group, Ltd. v.
AMR  Corporation et al. filed in the United States District Court  for
the  Northern  District  of California on June  29,  2006;  Miller  v.
British  Airways PLC et al. filed in the United States District  Court
for  the Eastern District of Pennsylvania on June 29, 2006; Nelson  v.
AMR  Corporation  filed in the United States District  Court  for  the
Eastern  District  of  New York on June 29,  2006;  Weiss  v.  British
Airways  PLC et al. filed in the United States District Court for  the
Eastern  District of Pennsylvania on June 30, 2006; Marco v.  American
Airlines,  Inc. et al. filed in the United States District  Court  for
the  Central District of California on June 30, 2006; and  Finegan  v.
British Airways PLC et al., filed in the United States District  Court
for  the Eastern District of New York on July 6, 2006) have been filed
against  the  Company  and certain foreign and domestic  air  carriers
alleging that the defendants violated U.S. antitrust laws by illegally
conspiring  to set prices and surcharges for passenger transportation.
These  cases are expected to be consolidated in an as yet undetermined
court  together with approximately 32 other class action  lawsuits  in
which  the Company has not been named as a defendant.  Plaintiffs  are
seeking  trebled  money damages and injunctive relief.  American  will
vigorously defend these lawsuits; however, any adverse judgment  could
have a material adverse impact on the Company.


                                         23





Item 5.  Other Information

As  discussed  in  the  AMR Proxy  Statement,  the  Compensation
Committee  of  the  AMR Board of Directors conducts  annually  a
comprehensive review of compensation for the executive officers of
AMR and American with independent compensation consultants engaged
by  the  Committee.   At the July 2006 meetings  of  the  Compensation
Committee  and the Board, the following compensation initiatives  were
approved (effective July 24, 2006):

  -  Grants of stock-settled stock appreciation rights pursuant to the
     form of Stock Appreciation Right Agreement ("SAR Agreement"), attached
     as Exhibit 10.1 to this Form 10-Q, and the corresponding Amendment to
     the AMR Corporation 1998 Long Term Incentive Plan, as Amended, dated
     as of July 19, 2006, attached as Exhibit 10.2 to this Form 10-Q.  An
     attachment to the form SAR Agreement notes the stock-settled stock
     appreciation right grants to the executive officers, effective July
     24, 2006.
  -  Grants of deferred shares pursuant to the form of Deferred Share
     Award Agreement for 2006 ("Deferred Share Agreement").  The form of
     the Deferred Share Agreement is attached as Exhibit 10.3 to this Form
     10-Q, and an attachment to the form Deferred Share Agreement notes the
     deferred share grants to the executive officers, effective July 24,
     2006.
  -  Grants of performance shares pursuant to the form of Performance
     Share Agreement ("Performance Share Agreement") under the 2006 - 2008
     Performance Share Plan for Officers and Key Employees.  The form of
     the Performance Share Agreement is attached as Exhibit 10.4 to this
     Form 10-Q, and an attachment to the form Performance Share Agreement
     notes the performance share grants to the executive officers,
     effective July 24, 2006.

For  Gerard J. Arpey, the Committee determined that an increase of Mr.
Arpey's  compensation  was necessary based on several  considerations,
including:

  -  According  to the data and recommendations of the  Committee's
     independent compensation consultants, the adjustments were required to
     begin to bring Mr. Arpey's compensation more in-line with median CEO
     compensation at comparably-sized companies and other airlines.
  -  The need to retain Mr. Arpey over the long-term.
  -  Mr. Arpey declined base salary increases upon his promotion to
     CEO in 2003, and in each of 2004 and 2005 (other than the 1.5% pay
     increase offered to all management employees).
  -  Internal equity related to the market-rate salary of the
     Company's new Chief Financial Officer.

At  the  July  2006  meetings  of the Committee  and  the  Board,  the
following  compensation initiatives were therefore  approved  for  Mr.
Arpey:

  -  Base salary increase to $650,000.
  -  Long-term incentive grants (effective July 24, 2006), comprised of:
     -  77,500 stock-settled Stock Appreciation Rights
     -  22,000 Deferred Shares
     -  100,000 Performance Shares
     -  58,000 career performance shares (pursuant to the terms of the
        Career Performance Shares, Deferred Stock Award Agreement between the
        Company and Mr. Arpey, dated as of July 25, 2005.  The form of this
        agreement is attached as Exhibit 10.6 to AMR's report on Form
        10-Q for the quarterly period ended June 30, 2005.)


                                         24



Item 6.  Exhibits

The following exhibits are included herein:

10.1  Form  of Stock Appreciation Right Agreement under the 1998  Long
      Term  Incentive Plan, as Amended (with awards to executive officers
      noted)

10.2  Amendment to the 1998 Long Term Incentive Plan, as Amended,  dated
      as of July 19, 2006

10.3  Form  of  2006 Deferred Share Award Agreement  (with  awards  to
      executive officers noted)

10.4  Form  of  Performance Share Agreement under the 2006  -  2008
      Performance Share Plan for Officers and Key Employees (with  awards
      to executive officers noted)

12    Computation of ratio of earnings to fixed charges for the  three
      and six months ended June 30, 2006 and 2005.

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).





                                         25














Signature

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


                               AMERICAN AIRLINES, INC.




Date:  July 25, 2006       BY: /s/Thomas W. Horton
                               Thomas W. Horton
                               Executive  Vice  President  and  Chief
                               Financial Officer
                               (Principal Financial and Accounting Officer)



                                         26