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, 2007.


[  ]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,   (817) 963-1234
including area code


                         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 20, 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.




                                INDEX

                        AMERICAN AIRLINES, INC.




PART I:   FINANCIAL INFORMATION


Item 1.  Financial Statements

  Consolidated Statements of Operations -- Three and six months ended
  June 30, 2007 and 2006

  Condensed Consolidated Balance Sheets -- June 30, 2007 and December
  31, 2006

  Condensed Consolidated Statements of Cash Flows -- Six months ended
  June 30, 2007 and 2006

  Notes  to  Condensed Consolidated Financial Statements -- June  30,
  2007

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,
                                    2007       2006       2007      2006
Revenues
    Passenger                      $4,673     $4,720    $8,999     $8,964
    Regional Affiliates               658        702     1,216      1,271
    Cargo                             200        206       401        392
    Other revenues                    322        331       639        659
      Total operating revenues      5,853      5,959    11,255     11,286

Expenses
  Wages, salaries and benefits      1,496      1,527     3,007       3,103
  Aircraft fuel                     1,479      1,544     2,754       2,876
  Regional payments to AMR Eagle      579        554     1,123       1,086
  Other rentals and landing fees      284        300       585         586
  Commissions, booking fees and
   credit card expense                268        286       517         555
  Depreciation and amortization       248        243       490         483
  Maintenance, materials and repairs  208        187       403         374
  Aircraft rentals                    149        144       297         285
  Food service                        130        128       255         251
  Other operating expenses            618        626     1,247       1,215
    Total operating expenses        5,459      5,539    10,678      10,814

Operating Income                      394        420       577         472

Other Income (Expense)
  Interest income                      84         67       160         119
  Interest expense                   (182)      (200)     (369)       (401)
  Interest capitalized                  5          7        14          14
  Related party interest - net        (21)       (11)      (41)        (17)
  Miscellaneous - net                  (9)        (3)      (19)        (13)
                                     (123)      (140)     (255)       (298)

Income Before Income Taxes            271        280       322         174
Income tax                              -          -         -           -
Net Earnings                       $  271     $  280      $322      $  174






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,
                                                   2007           2006
Assets
Current Assets
  Cash                                         $    213        $   120
  Short-term investments                          5,607          4,527
  Restricted cash and short-term investments        470            468
  Receivables, net                                1,192            957
  Inventories, net                                  485            465
  Other current assets                              456            213
    Total current assets                          8,423          6,750

Equipment and Property
  Flight equipment, net                          11,377         11,524
  Other equipment and property, net               2,368          2,343
  Purchase deposits for flight equipment            177            177
                                                 13,922         14,044

Equipment and Property Under Capital Leases
  Flight equipment, net                             726            765
  Other equipment and property, net                  88             99
                                                    814            864

Route  acquisition costs and airport operating
and gate lease rights, net                        1,148          1,143
Other assets                                      2,869          3,049
                                               $ 27,176        $25,850
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
  Accounts payable                             $  1,278        $   987
  Accrued liabilities                             1,966          2,164
  Air traffic liability                           4,607          3,782
  Payable to affiliates, net                      1,583          1,071
  Current maturities of long-term debt              946          1,012
  Current obligations under capital leases          123            101
    Total current liabilities                    10,503          9,117

Long-term debt, less current maturities           7,315          7,787
Obligations under capital leases, less
 current obligations                                730            824
Pension and postretirement benefits               5,341          5,340
Other liabilities, deferred gains and
 deferred credits                                 3,809          3,848

Stockholders' Equity (Deficit)
  Common stock                                        -              -
  Additional paid-in capital                      3,817          3,667
  Accumulated other comprehensive loss           (1,327)        (1,399)
  Accumulated deficit                            (3,012)        (3,334)
                                                   (522)        (1,066)
                                               $ 27,176        $25,850


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,
                                                  2007           2006

Net Cash Provided by Operating Activities         $1,534        $1,452

Cash Flow from Investing Activities:
  Capital expenditures                              (337)         (238)
  Net increase in short-term investments          (1,080)       (1,299)
  Net increase in restricted cash and
   short-term investments                             (2)          (15)
  Proceeds from sale of equipment and property        20             9
  Other                                                4            (6)
        Net cash used by investing activities     (1,395)       (1,549)

Cash Flow from Financing Activities:
  Payments on long-term debt and capital
   lease obligations                                (610)         (380)
  Reimbursement from construction reserve account     59            75
  Funds transferred from affiliates, net             505           433
        Net cash provided (used) by financing
          activities                                 (46)          128

Net increase in cash                                  93            31
Cash at beginning of period                          120           133

Cash at end of period                             $  213         $ 164
































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/A
  for the year ended December 31, 2006 (2006 Form 10-K).

2.In  March  2007, American announced its intent to pull  forward  the
  delivery  of  47  737-800  aircraft  that  American  had  previously
  committed  to  acquire  in 2013 through 2016.   On  June  28,  2007,
  American  announced that it had accelerated the delivery of  six  of
  these  aircraft  into  the first 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  June  30,  2007,  the
  Company had commitments to acquire nine Boeing 737-800s in 2009  and
  an  aggregate  of 38 Boeing 737-800s and seven Boeing 777-200ERs  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 nine aircraft  already  pulled
  forward  is  approximately $250 million.   This  amount  is  net  of
  purchase deposits currently held by the manufacturer.

3.Accumulated depreciation of owned equipment and property at June 30,
  2007 and December 31, 2006 was $10.3 billion and $10.0 billion,
  respectively.   Accumulated amortization of equipment  and  property
  under  capital  leases was $1.1 billion at both June  30,  2007  and
  December 31, 2006.

4.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
  June 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.



                                     -4-

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

5.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  six  months
  ended  June 30, 2007.  The application of FIN 48 would have resulted
  in  an  immaterial change in retained earnings, except that  it  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  June
  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 $69 million during  the
  six  months ended June 30, 2007 to $1.7 billion as of June 30, 2007,
  including  the  impact of comprehensive income for  the  six  months
  ended  June 30, 2007, changes described above from applying  FIN  48
  and certain other adjustments.

  Under  special IRS rules (the "Section 382 Limitation"),  cumulative
  stock purchases by material shareholders exceeding 50% during  a  3-
  year  period  can potentially limit a company's future  use  of  net
  operating  losses  (NOL's).  Such limitation is currently  increased
  by  "built-in gains", as provided by current guidance.  The  Company
  is  not currently subject to the "Section 382 Limitation", and if it
  were  triggered in a future period, under current tax rules, is  not
  expected  to  significantly impact the recorded value or  timing  of
  utilization of AMR's NOL's.

  Various taxes and fees assessed on the sale of tickets to end
  customers are collected by the Company as an agent and remitted to
  taxing authorities. These taxes and fees have been presented on a
  net basis in the accompanying consolidated statement of operations
  and recorded as a liability until remitted to the appropriate
  taxing authority.







                                   -5-






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

6.As  of  June  30, 2007, American had issued guarantees  covering
  approximately $1.1 billion of AMR's unsecured debt.  In addition, as
  of  June  30, 2007, AMR and American had issued guarantees  covering
  approximately $368 million of AMR Eagle's secured debt.

  On  March  30, 2007, American paid in full the principal balance  of
  its  senior secured revolving credit facility.  As of June 30, 2007,
  the  $442  million  term loan facility under the  same  bank  credit
  facility was still outstanding and the $275 million balance  of  the
  revolving  credit  facility remains available  to  American  through
  maturity.  The revolving credit facility amortizes at a rate of  $10
  million   quarterly   through   December   17,   2007.    American's
  obligations under the credit facility are guaranteed by AMR.

7.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  $113
  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.  The Company realized $497 million  from
  the  sale  of  equity.   The  proceeds  from  the  transaction  were
  transferred to American.























                                   -6-



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

8.The  following  tables provide the components  of  net  periodic
  benefit cost for the three and six months ended June 30, 2007 and 2006
  (in millions):

                                           Pension Benefits
                                 Three Months Ended      Six Months Ended
                                       June 30,              June 30,
                                  2007        2006       2007        2006

  Components  of  net  periodic
   benefit cost

   Service cost                 $   93      $  100     $  185      $  199
   Interest cost                   168         160        336         321
   Expected return on assets      (187)       (167)      (374)       (335)
   Amortization of:
   Prior service cost                4           4          8           8
   Unrecognized net loss             6          20         13          40

   Net periodic benefit cost    $   84      $  117     $  168      $  233


                                     Other Postretirement Benefits
                                 Three Months Ended      Six Months Ended
                                      June 30,               June 30,
                                   2007       2006       2007       2006

  Components  of  net  periodic
   benefit cost

   Service cost                 $   18      $   20     $   35      $   38
   Interest cost                    49          49         96          96
   Expected return on assets        (5)         (4)        (9)         (8)
   Amortization of:
   Prior service cost               (3)         (3)        (7)         (5)
   Unrecognized net (gain) loss     (2)          -         (4)          1

   Net periodic benefit cost    $   57      $   62     $  111      $  122

  The  Company expects to contribute approximately $364 million to its
  defined  benefit pension plans in 2007. The Company's  estimates  of
  its   defined   benefit  pension  plan  contributions  reflect   the
  provisions  of  the  Pension Funding Equity  Act  of  2004  and  the
  Pension  Protection  Act of 2006.  Of the $364 million  the  Company
  expects to contribute to its defined benefit pension plans in  2007,
  the  Company  contributed $180 million during the six  months  ended
  June 30, 2007 and contributed $86 million on July 13, 2007.




                                       -7-



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


9.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  of  these  changes  and  the  remaining
  accruals for these charges (in millions):

                                 Aircraft   Facility
                                 Charges   Exit Costs  Total
      Remaining accrual
       at December 31, 2006       $ 126     $   19     $ 145
      Payments                       (8)         -        (8)
      Remaining accrual
       at June 30, 2007           $ 118     $   19     $ 137

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

10.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 June 30,  2007  and
  2006,  comprehensive  income  was $271  million  and  $291  million,
  respectively, and for the six months ended June 30, 2007  and  2006,
  comprehensive income was $394 million and $205 million, respectively.
  The difference between net earnings and comprehensive income for the
  three and six months ended June 30, 2007 and 2006 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.  In doing  so,
  the Company uses a regression model to determine the correlation  of
  the  change  in  prices of the commodities used to  hedge  jet  fuel
  (e.g.  NYMEX  Heating oil) to the change in the price of  jet  fuel.
  The  Company  also monitors the actual dollar offset of the  hedges'
  market  values  as  compared to hypothetical jet fuel  hedges.   The
  fuel  hedge  contracts are generally deemed to be "highly effective"
  if  the  R-squared is greater than 80 percent and the dollar  offset
  correlation  is  within  80  percent to 125  percent.   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.

11.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 prior to October 31, 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.


                              -8-



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  our  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 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 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 and  volatile  fuel
prices   and  further  increases  in  the  price  of  fuel,  and   the
availability  of  fuel;  the  fiercely  and  increasingly  competitive
business  environment  faced by the Company;  industry  consolidation,
competition  with  reorganized  and reorganizing  carriers;  low  fare
levels  by  historical  standards and the  Company's  reduced  pricing
power; the Company's potential need to raise additional funds and  its
ability  to  do  so  on  acceptable terms; changes  in  the  Company's
corporate or 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;
labor   costs   that  are  higher  than  the  Company's   competitors;
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 the Company'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  2006
Form  10-K (see in particular Item 1A "Risk Factors" in the 2006  Form
10-K).

Overview

The  Company  recorded  net earnings of $271  million  in  the  second
quarter of 2007 compared to $280 million in the same period last year.
The  Company's  second  quarter  2007  results  were  impacted  by  an
improvement  in  unit revenues (passenger revenue per  available  seat
mile) and by fuel prices that remain high by historical standards.  In
addition, a significant number of weather related events impacted  the
Company's  second  quarter  results and the  Company  estimates  these
disruptions  decreased scheduled mainline departures  for  the  second
quarter of 2007 by approximately 2.1 percent and reduced the Company's
revenue by approximately $40 million during the quarter.


                                 -9-


Mainline passenger unit revenues increased 3.6 percent for the second
quarter  due  to a 1.0 point load factor increase and a  2.3  percent
increase  in  passenger yield (passenger revenue per passenger  mile)
compared   to  the  same  period  in  2006.   Although  load   factor
performance  and  passenger yield showed year-over-year  improvement,
passenger  yield  remains low by historical standards.   The  Company
believes  this  is  the result of excess industry  capacity  and  its
reduced  pricing power resulting from a number of factors,  including
greater  cost  sensitivity  on  the  part  of  travelers  (especially
business  travelers), increased competition from  LCC's  and  pricing
transparency resulting from the use of the internet.

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.   Certain 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 11-17) in the 2006 Form 10-K.  In addition, four  of
the  Company's largest domestic competitors have filed for  bankruptcy
in  the last several years and have used this process to significantly
reduce  contractual  labor  and  other  costs.   In  order  to  remain
competitive  and to improve its financial condition, the Company  must
continue  to take steps to generate additional revenues and to  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.
























                                   -10-



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 2006 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
ongoing  pension funding obligations, the Company may need  access  to
additional  funding.  The Company continues to evaluate  the  economic
benefits and other aspects of replacing some of the older aircraft  in
its fleet prior to 2013 and also continues to evaluate the appropriate
mix  of  aircraft  in  its  fleet.  The Company's  possible  financing
sources  primarily include: (i) a limited amount of additional secured
aircraft  debt or sale-leaseback transactions involving owned aircraft
(a  very  large  majority of the Company's owned  aircraft,  including
virtually  all  of the Company's Section 1110-eligible  aircraft,  are
encumbered); (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;  (vi)
unsecured  debt;  and  (vii)  issuance of  equity  and/or  equity-like
securities.   However, the availability and level of  these  financing
sources  cannot  be assured, particularly in light  of  the  Company's
recent  financial  results, substantial indebtedness,  current  credit
ratings,  high  fuel prices and the financial difficulties  that  have
been experienced in the airline industry. The inability of the Company
to obtain additional 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  the  Company's 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 secured bank credit facility which consists of  a  $275
million  revolving credit facility, with a final maturity on June  17,
2009,  and a fully drawn $442 million term loan facility, with a final
maturity  on  December 17, 2010 (the Revolving Facility and  the  Term
Loan  Facility, respectively, and collectively, the Credit  Facility).
On  March 30, 2007, American paid in full the principal balance of the
Revolving  Facility  and  as of June 30, 2007,  it  remained  undrawn.
American's  obligations under the Credit Facility  are  guaranteed  by
AMR.

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 1.30 to  1.00  for  the  four
quarter  period ending June 30, 2007, and will increase gradually  for
each  four  quarter  period ending on each fiscal  quarter  thereafter
until it reaches 1.50 to 1.00 for the four quarter period ending  June
30,  2009.  AMR  and  American were in compliance with  the  Liquidity
Covenant and the EBITDAR covenant as of June 30, 2007 and expect to be
able  to continue to comply with these covenants.  However, given fuel
prices  that  are high by historical standards 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  these
covenants, and there are no assurances that AMR and American  will  be
able to do so.  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  have  a
material adverse impact on the Company.


                                  -11-

Pension Funding Obligation

The  Company expects to contribute approximately $364 million to  its
defined benefit pension plans in 2007. The Company's estimates of its
defined benefit pension plan contributions reflect the provisions  of
the Pension Funding Equity Act of 2004 and the Pension Protection Act
of  2006.   Of the $364 million the Company expects to contribute  to
its  defined  benefit pension plans in 2007, the Company  contributed
$180  million  during  the  six  months  ended  June  30,  2007   and
contributed $86 million on July 13, 2007.

The  U.S  Congress  is currently considering legislation  that  would
allow  commercial airline pilots to fly until age  65.   The  Federal
Aviation  Administration  currently  requires  commercial  pilots  to
retire  once  they reach age 60.  The Company has not  completed  its
evaluation of the impact of the proposed legislation on its financial
statements; however, the proposed legislation could have  a  material
impact  on  the Company's valuation of its liability for pension  and
postretirement benefits.

Compensation

As described in Note 7 to the condensed consolidated financial
statements, during 2006 and January 2007, the AMR Board of Directors
approved the amendment and restatement of all of the outstanding
performance share plans, the related performance share agreements and
deferred share agreements that required settlement in cash.  The plans
were amended to permit settlement in cash and/or stock; however, the
amendments did not impact the fair value of the awards under the
plans.  These changes were made in connection with a grievance filed
by the Company's three labor unions which asserted that a cash
settlement may be contrary to a component of the Company's 2003 Annual
Incentive Program agreement with the unions.

American   has  a  profit  sharing  program  that  provides   variable
compensation  that rewards frontline employees when American  achieves
certain  financial  targets.   Generally,  the  profit  sharing   plan
provides for a profit sharing pool for eligible employees equal to  15
percent  of  pre-tax  income of American in excess  of  $500  million.
Based  on  current  conditions, the Company's  condensed  consolidated
financial statements include an accrual for profit sharing.  There can
be  no  assurance that the Company's forecasts will approximate actual
results.   Additionally,  reductions in  the  Company's  forecasts  of
income  for 2007 could result in the reversal of a portion or  all  of
the previously recorded profit sharing expense.

Cash Flow Activity

At  June 30, 2007, the Company had $5.8 billion in unrestricted  cash
and short-term investments, an increase of $1.2 billion from December
31,  2006,  and $275 million available under the Revolving  Facility.
Net  cash  provided by operating activities in the  six-month  period
ended June 30, 2007 was $1.5 billion, an increase of $82 million over
the same period in 2006 primarily due to the Company's management  of
capacity. The Company contributed $180 million to its defined benefit
pension  plans  in  the  first six months of 2007  compared  to  $119
million during the first six months of 2006.

Capital  expenditures  for the first six months  of  2007  were  $337
million and primarily included aircraft modifications and the cost of
improvements  at  New  York's  John  F.  Kennedy  airport  (JFK).   A
significant portion of the Company's construction costs at  JFK  have
been  reimbursed through a fund established from a previous financing
transaction.

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

In the past, the Company has from time to time refinanced, redeemed or
repurchased its debt and taken other steps to reduce its debt or lease
obligations or otherwise improve its balance sheet. Going forward,
depending on market conditions, its cash position or other
considerations, the Company may continue to take such actions.





                                 -12-


RESULTS OF OPERATIONS

For the Six Months Ended June 30, 2007 and 2006

Revenues

The  Company's revenues decreased approximately $31 million,  or  0.3
percent, to $11.3 billion for the six months ended June 30, 2007 from
the  same  period last year.  American's passenger revenues increased
by 0.4 percent, or $35 million, while capacity (ASM) decreased by 3.4
percent.   American's passenger load factor increased 0.9  points  to
80.9 percent and passenger revenue yield per passenger mile increased
by  2.8  percent  to 13.19 cents.  This resulted in  an  increase  in
American's passenger RASM of 4.0 percent to 10.67 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, 2007
                           RASM       Y-O-Y      ASMs       Y-O-Y
                          (cents)     Change   (billions)   Change

   DOT Domestic            10.56       1.5%       53.9      (3.9)%
   International           10.87       8.5        30.4      (2.7)
      DOT Latin America    11.23       7.0        15.0       0.5
      DOT Atlantic         10.70       6.1        12.0      (1.8)
      DOT Pacific           9.86      22.8         3.4     (17.4)

The   Company's   Regional  Affiliates  include  two   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, decreased $55 million, or 4.3 percent, to $1.2 billion as  a
result  of  decreased  capacity, load factors  and  passenger  yield.
Regional  Affiliates' traffic decreased 1.7 percent  to  4.9  billion
revenue passenger miles (RPMs) and capacity decreased 0.6 percent  to
6.7  billion ASMs, resulting in a 0.9 point decrease in the passenger
load factor to 73.0 percent.










                                 -13-


Operating Expenses

The  Company's total operating expenses decreased 1.3 percent, or $136
million,  to  $10.7  billion for the six months ended  June  30,  2007
compared  to  the same period in 2006.  American's mainline  operating
expenses  per ASM in the six months ended June 30, 2007 increased  1.8
percent  compared  to the same period in 2006 to  11.03  cents.  These
increases are due primarily to a significant number of weather related
cancellations in 2007.

   (in millions)                  Six Months
                                    Ended         Change    Percentage
   Operating Expenses            June 30, 2007   from 2006    Change

   Wages, salaries and benefits  $  3,007         $ (96)       (3.1)%
   Aircraft fuel                    2,754          (122)       (4.2)
   Regional payments to AMR Eagle   1,123            37         3.4
   Other rentals and landing fees     585            (1)       (0.2)
   Commissions, booking fees
    and credit card expense           517           (38)       (6.8)
   Depreciation and amortization      490             7         1.4
   Maintenance, materials  and
    repairs                           403            29         7.8
   Aircraft rentals                   297            12         4.2
   Food service                       255             4         1.6
   Other operating expenses         1,247            32         2.6
   Total operating expenses      $ 10,678         $(136)       (1.3)%

Other Income (Expense)

Interest income increased $41 million in the six months ended June 30,
2007  compared to the same period in 2006 due primarily to an increase
in  short-term  investment balances.  Interest expense  decreased  $32
million  as  a  result of a decrease in the Company's  long-term  debt
balance.

Income Tax

The  Company  did not record a net tax provision associated  with  its
second  quarter 2007 and 2006 earnings due to the Company providing  a
valuation   allowance,  as  discussed  in  Note  5  to  the  condensed
consolidated financial statements.
















                                     -14-





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, 2007 and 2006 (in millions):

                                     Six Months Ended
                                         June 30,
                                     2007         2006
       Revenues:
       Regional Affiliates         $1,216       $1,271
       Other                           49           50
                                   $1,265       $1,321

       Expenses:
       Payments to Regional        $1,222       $1,184
       Affiliates
       Other incurred expenses        156          159
                                   $1,378       $1,343

In addition, passengers connecting to American's flights from American
Connection  and  AMR  Eagle flights generated passenger  revenues  for
American  flights of $878 million and $867 million for the six  months
ended  June  30,  2007 and 2006, respectively, which are  included  in
Revenues - Passenger in the consolidated statements of operations.

Outlook

The Company currently expects third quarter 2007 mainline unit cost to
increase  approximately 2.4 percent year over year.   Full  year  2007
mainline unit costs are expected to increase approximately 2.3 percent
versus 2006.

Capacity for American's mainline jet operations is expected to decline
more  than  2.4 percent in the third quarter of 2007 compared  to  the
third  quarter  of  2006.  Mainline capacity is  expected  to  decline
approximately 2.1 percent in the full year 2007 compared to 2006.






















                                  -15-



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 2006  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, 2007 cost per gallon of  fuel.   Based  on
projected  2007  and 2008 fuel usage through June 30,  2008,  such  an
increase  would  result  in an increase to aircraft  fuel  expense  of
approximately $483 million in the twelve months ended June  30,  2008,
inclusive of the impact of fuel hedge instruments outstanding at  June
30, 2007.  Comparatively, based on projected 2007 fuel usage, such  an
increase  would have resulted in an increase to aircraft fuel  expense
of  approximately $478 million in the twelve months ended December 31,
2007, inclusive of the impact of fuel hedge instruments outstanding at
December 31, 2006.  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.  In doing so, the Company uses a regression model
to   determine  the  correlation  of  the  change  in  prices  of  the
commodities  used to hedge jet fuel (e.g. NYMEX Heating  oil)  to  the
change in the price of jet fuel.  The Company also monitors the actual
dollar offset of the hedges' market values as compared to hypothetical
jet fuel hedges.  The fuel hedge contracts are generally deemed to  be
"highly effective" if the R-squared is greater than 80 percent and the
dollar  offset correlation is within 80 percent to 125  percent.   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  of  June  30,  2007, the Company had effective  hedges,  primarily
collars,  covering approximately 31 percent of its estimated remaining
2007  fuel  requirements and an insignificant amount of its  estimated
fuel   requirements  thereafter.   The  consumption  hedged  for   the
remainder  of 2007 is capped at an average price of approximately  $62
per  barrel of crude oil.  A deterioration of the Company's  financial
position  could negatively affect the Company's ability to hedge  fuel
in the future.












                                 -16-



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, 2007.  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, 2007. During the
quarter  ending on June 30, 2007, 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.









































                                       -17-

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.  The cases, 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 (71 agencies) were consolidated for pre-trial purposes in the
United  States  District  Court for the  Northern  District  of  Ohio,
Eastern  Division.   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.  On September 23,
2005, the Fausky plaintiffs dismissed their claims with prejudice.  On
September 14, 2006, the court dismissed with prejudice 28 of the Swope
plaintiffs.   American continues to vigorously defend these  lawsuits.
A  final adverse court decision awarding substantial money damages  or
placing  material restrictions on the Company's distribution practices
would have a material adverse impact on the Company.












                                -18-



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.

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 American'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 American 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  APFA  and
American relating to the RPA and the ratification vote on the  RPA  by
individual  APFA members, including: violation of the Labor Management
Reporting  and Disclosure Act (LMRDA) and the APFA's Constitution  and
By-laws,  violation by the APFA of its duty of fair representation  to
its  members, violation by American 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 American, all but one of the LMRDA claims against  the
APFA,  and  the  claimed violations of RICO.  This  left  the  claimed
violations  of  the  RLA  and the duty of fair representation  against
American  and  the  APFA (as well as one LMRDA  claim  and  one  claim
against  the  APFA of a breach of its constitution).  By letter  dated
February  9,  2007,  plaintiffs'  counsel  informed  counsel  for  the
defendants  that  plaintiffs do not intend to pursue the  LMRDA  claim
against  APFA further.  Although the Company believes the case against
it  is  without  merit and both American and the APFA  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.










                                   -19-




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.  On
December 19, 2006 and June 12, 2007, the Company received requests for
information   from   the  European  Commission,  seeking   information
regarding  the  Company's  corporate structure,  revenue  and  pricing
announcements for air cargo shipments to and from the European  Union.
On January 23, 2007, the Brazilian competition authorities, as part of
an  ongoing  investigation,  conducted an unannounced  search  of  the
Company's  cargo  facilities  in Sao  Paulo,  Brazil.   The  Brazilian
authorities  are investigating whether the Company and  certain  other
foreign and domestic air carriers violated Brazilian competition  laws
by illegally conspiring to set fuel surcharges on cargo shipments.  On
June 27, 2007, the Company received a request for information from the
Australian  Competition  and Consumer Commission  seeking  information
regarding fuel surcharges imposed by the Company on cargo shipments to
and  from Australia and regarding the structure of the Company's cargo
operations.   The  Company  intends  to  cooperate  fully  with  these
investigations  and  inquiries.  In the  event  that  these  or  other
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.
Approximately  44 purported class action lawsuits have been  filed  in
the  U.S.  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, along with other purported class action lawsuits in which
the  Company  was  not named, were consolidated in the  United  States
District Court for the Eastern District of New York as In re Air Cargo
Shipping  Services Antitrust Litigation, 06-MD-1775 on June 20,  2006.
Plaintiffs  are  seeking trebled money damages and injunctive  relief.
The  Company  has  not been named as a defendant in  the  consolidated
complaint filed by the plaintiffs.  However, the plaintiffs  have  not
released  any claims that they may have against the Company,  and  the
Company may later be added as a defendant in the litigation.   If  the
Company  is sued on these claims, it will vigorously defend the  suit,
but  any adverse judgment could have a material adverse impact on  the
Company.   Also, on January 23, 2007, the Company was  served  with  a
purported  class action complaint filed against the Company, American,
and certain foreign and domestic air carriers in the Supreme Court  of
British  Columbia in Canada (McKay v. Ace Aviation Holdings, et  al.).
The   plaintiff   alleges  that  the  defendants   violated   Canadian
competition laws by illegally conspiring to set prices and  surcharges
on  cargo  shipments.  The complaint seeks compensatory  and  punitive
damages  under Canadian law.  On June 22, 2007, the plaintiffs  agreed
to  dismiss their claims against the Company. The dismissal is without
prejudice,  and the Company could be brought back into the  litigation
at  a future date. If litigation is recommenced against the Company in
the  Canadian  courts,  the  Company will  vigorously  defend  itself;
however, any adverse judgment could have a material adverse impact  on
the Company.

On  June  20,  2006,  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
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  this  or  other
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.
Approximately  52 purported class action lawsuits have been  filed  in
the  U.S.  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, along with other purported class  action
lawsuits in which the Company was not named, were consolidated in  the
United  States District Court for the Northern District of  California
as   In   re  International  Air  Transportation  Surcharge  Antitrust
Litigation,  M  06-01793 on October 25, 2006.  On July  9,  2007,  the
Company  was  named  as  a  defendant in the  consolidated  complaint.
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.

American is defending a lawsuit (Love Terminal Partners, L.P.  et  al.
v.  The  City of Dallas, Texas et al.) filed on July 17, 2006  in  the
United  States District Court in Dallas.  The suit was brought by  two
lessees  of facilities at Dallas Love Field Airport against  American,
the cities of Fort Worth and Dallas, Southwest Airlines, Inc., and the
Dallas/Fort Worth International Airport Board.  The suit alleges  that
an agreement by and between the five defendants with respect to Dallas
Love  Field  violates Sections 1 and 2 of the Sherman Act.  Plaintiffs
seek   injunctive  relief  and  compensatory  and  statutory  damages.
American  will  vigorously defend this lawsuit; however,  any  adverse
judgment could have a material adverse impact on the Company.



                              -20-


On  August  21, 2006, a patent infringement lawsuit was filed  against
American and American Beacon Advisors, Inc. (a wholly-owned subsidiary
of  the  Company), in the United States District Court for the Eastern
District  of  Texas  (Ronald  A. Katz Technology  Licensing,  L.P.  v.
American Airlines, Inc., et al.).  This case has been consolidated  in
the  Central  District  of  California  for  pre-trial  purposes  with
numerous   other  cases  brought  by  the  plaintiff   against   other
defendants.   The plaintiff alleges that American and American  Beacon
infringe a number of the plaintiff's patents, each of which relates to
automated telephone call processing systems.  The plaintiff is seeking
past  and  future royalties, injunctive relief, costs  and  attorneys'
fees.   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 automated telephone call system  operations
would have a material adverse impact on the Company.

American is defending a lawsuit (Kelley Kivilaan v. American Airlines,
Inc.), filed on September 16, 2004 in the United States District Court
for  the  Middle  District of Tennessee.  The suit was  brought  by  a
flight  attendant who seeks to represent a purported class of  current
and  former flight attendants.  The suit alleges that several  of  the
Company's medical benefits plans discriminate against females  on  the
basis  of  their gender in not providing coverage in all circumstances
for  prescription  contraceptives.  Plaintiff seeks injunctive  relief
and  monetary  damages.   A motion for class  certification  has  been
filed,  but  the  case has not yet been certified as a  class  action.
American  will  vigorously defend this lawsuit; however,  any  adverse
judgment could have a material adverse impact on the Company.



























                                -21-




Item 5.  Other Information
As  discussed  in  the  Company's Proxy  Statement,  the  Compensation
Committee  of  the  Company's Board of Directors conducts  annually  a
comprehensive review of compensation for the executive officers of the
Company and American with independent compensation consultants engaged
by  the  Committee.   At the July 2007 meetings  of  the  Compensation
Committee  and the Board, the following compensation initiatives  were
approved (effective July 23, 2007):

  -  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.  An attachment to the form SAR
     Agreement notes the stock-settled stock appreciation right grants to
     the executive officers, effective July 23, 2007.

  -  Grants of deferred shares pursuant to the form of Deferred Share
     Award Agreement for 2007 ("Deferred Share Agreement").  The form of
     the Deferred Share Agreement is attached as Exhibit 10.2 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 23, 2007.

  -  Grants of performance shares pursuant to the form of Performance
     Share Agreement ("Performance Share Agreement") under the 2007 - 2009
     Performance Share Plan for Officers and Key Employees ("Performance Share
     Plan"). The form of the Performance Share Agreement and Performance Share
     Plan are attached as Exhibit 10.3 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 23, 2007.

  -  A grant of 58,000 career performance shares (effective July 23,
     2007) pursuant to the terms of the Career Performance Shares, Deferred
     Stock Award Agreement between the Company and Gerard J. Arpey, dated
     as of July 25, 2005.  The form of this agreement is attached as
     Exhibit 10.6 to the Company's report on Form 10-Q for the quarterly
     period ended June 30, 2005.




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  Form  of  2007 Deferred Share Award Agreement  (with  awards  to
      executive officers noted)

10.3  Form  of  Performance Share Agreement under the 2007  -  2009
      Performance Share Plan for Officers and Key Employees and the
      2007 - 2009 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, 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).
















                                   -22-


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 24, 2007           BY: /s/  Thomas W. Horton
                               Thomas W. Horton
                               Executive Vice President and Chief
                               Financial Officer
                              (Principal Financial and Accounting Officer)


































                                     -23-