----

----

| Delaware                                                                |   | 13-1502798                                    |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) |   | (IRS      EmployerIdentification      Number) |

| Title of Each Class |   | Name of Exchange on Which      Registered |
|---------------------|--------|-------------------------------------------|
| NONE                |   | NONE                                      |

----

| PART      I |
|-------------|

----

----

----

----

----

----

----

|     Year |   |   GallonsConsumed(in      millions) |   |    Total      Cost(in      millions) |   |  Average      Cost Per Gallon(in      cents) |   |  Percent      of American's Operating Expenses |
|------------------------------|--------|-----------------------------------------------|--------|-----------------------------------------------------|--------|---------------------------------------------------|--------|-----------------------------------------------------|
|                         |   |                                          |   |                                                |   |                                              |   |                                                |
| 2005                         |   | 2,948                                         |   | 5,080                                               |   |       172.3         |   | 24.2                                                |
| 2006                         |   | 2,881                                         |   | 5,784                                               |   |       200.8         |   | 26.7                                                |
| 2007                         |   | 2,834                                         |   | 6,011                                               |   |       212.1         |   |  27.2                                          |

----

----

----

| ·   | actual      or potential changes in international, national, regional and local      economic, business and financial conditions, including recession,      inflation and higher interest rates, war, terrorist attacks or political      instability; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes      in consumer preferences, perceptions, spending patterns or demographic      trends; |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | changes      in the competitive environment due to industry consolidation and other      factors; |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   | actual      or potential disruptions to the air traffic control  system; |
|--------------------|--------------------------------------------------------------------------|

| ·   | increases      in costs of safety, security and environmental  measures; |
|--------------------|--------------------------------------------------------------------------|

| ·   | outbreaks      of diseases that affect travel behavior;and |
|--------------------|------------------------------------------------------------|

| ·   | weather      and natural disasters. |
|--------------------|-------------------------------------|

----

| ·   | limit      our 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; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | require      us to dedicate a substantial portion of our cash flow from operations to      payments on our indebtedness and other obligations, thereby reducing the      funds available for other purposes; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | make      us more vulnerable to economicdownturns; |
|--------------------|----------------------------------------------------|

| ·   | limit      our ability to withstand competitive pressures and reduce our flexibility      in responding to changing business and economic conditions;    or |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit      our flexibility in planning for, or reacting to, changes in our business      and the industry in which weoperate. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ·   | changes      in law which affect the services that can be offered by airlines in      particular markets and at particularairports; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      granting and timing of certain governmental approvals (including foreign      government approvals) needed for codesharing alliances and other      arrangements with other airlines; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | restrictions      on competitive practices (for example court orders, or agency regulations      or orders, that would curtail an airline’s ability to respond to a      competitor); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      adoption of regulations that impact customer service standards (for      example new passenger security standards, passenger bill of rights);      or |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      adoption of more restrictive locally-imposed noise      restrictions. |
|--------------------|--------------------------------------------------------------------------------|

----

----

----

|   Equipment      Type    |   |  Average      Seating Capacity |   |   Owned |   |  Capital      Leased |   |  Operating      Leased |   |   Total |   | AverageAge      (Years) |
|------------------------------------|--------|-------------------------------------|--------|-------------------|--------|---------------------------|--------|-----------------------------|--------|-------------------|--------|-------------------------|
|                               |   |                                |   |              |   |                      |   |                        |   |              |   |                    |
| American      Airlines Aircraft    |   |                                |   |              |   |                      |   |                        |   |              |   |                    |
| Airbus      A300-600R              |   | 267                                 |   | 10                |   | -                         |   | 24                          |   | 34                |   | 18                      |
| Boeing      737-800                |   | 148                                 |   | 67                |   | -                         |   | 10                          |   | 77                |   | 8                       |
| Boeing      757-200                |   | 188                                 |   | 87                |   | 6                         |   | 31                          |   | 124               |   | 13                      |
| Boeing      767-200 Extended Range |   | 167                                 |   | 3                 |   | 11                        |   | 1                           |   | 15                |   | 21                      |
| Boeing      767-300 Extended Range |   | 225                                 |   | 47                |   | -                         |   | 11                          |   | 58                |   | 14                      |
| Boeing      777-200 Extended Range |   | 246                                 |   | 47                |   | -                         |   | -                           |   | 47                |   | 7                       |
| McDonnell      Douglas MD-80       |   | 139                                 |   | 126               |   | 67                        |   | 107                         |   | 300               |   | 18                      |
| Total                              |   |                                |   | 387               |   | 84                        |   | 184                         |   | 655               |   | 15                      |
|                               |   |                                |   |              |   |                      |   |                        |   |              |   |                    |

|  Equipment      Type          |   |   |   |  Owned |   | Capital      Leased |   | Operating      Leased |   |  Total |   |   |
|------------------------------------|--------|--------|--------|-------------|--------|---------------------|--------|-----------------------|--------|-------------|--------|--------|
|                               |   |   |   |        |   |                |   |                  |   |        |   |   |
| American      Airlines Aircraft    |   |   |   |        |   |                |   |                  |   |        |   |   |
| Boeing      757-200TW              |   |   |   |        |   |  -             |   |  5               |   |  5     |   |   |
| Boeing      767-200 Extended Range |   |   |   |  -     |   |  -             |   |  1               |   |  1     |   |   |
| Fokker      100                    |   |   |   |  -     |   |  -             |   |  4               |   |  4     |   |   |
| McDonnell      Douglas MD-80       |   |   |   |  13    |   |  11            |   |  13              |   |  37    |   |   |
| Total                              |   |   |   |  13    |   |  11            |   |  23              |   |  47    |   |   |
|                               |   |   |   |        |   |                |   |                  |   |        |   |   |

----

|   Equipment      Type    |   |  2008 |   |   |  2009 |   |   |  2010 |   |   |  2011 |   |   |  2012 |   |   | 2013and      Thereafter |   |
|------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-------------------------|--------|
|                               |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |                    |   |
| American      Airlines Aircraft    |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |                    |   |
| Airbus      A300-600R              |   |       | 3      |   |       |   | 3      |       |   |   | 9          |   |   |       | 9      |   |                    |   | - |   |   |   | - |   |
| Boeing      737-800                |   |       | -      |   |       |   | -      |       |   |   | -          |   |   |       | -      |   |                    |   | - |   |   |   | 10 |   |
| Boeing      757-200                |   |       | 5      |   |       |   | 1      |       |   |   | -          |   |   |       | 1      |   |                    |   | - |   |   |   | 30 |   |
| Boeing      767-200 Extended Range |   |       | -      |   |       |   | 1      |       |   |   | 1          |   |   |       | 2      |   |                    |   | 2 |   |   |   | 6 |   |
| Boeing      767-300 Extended Range |   |       | 3      |   |       |   | -      |       |   |   | -          |   |   |       | -      |   |                    |   | - |   |   |   | 8 |   |
| McDonnell      Douglas MD-80       |   |       | -      |   |       |   | -      |       |   |   | 11         |   |   |       | 21     |   |                    |   | 23 |   |   |   | 119 |   |
|                               |   |       | 11     |   |       |   | 5      |       |   |   | 21         |   |   |       | 33     |   |                    |   | 25 |   |   |   | 173 |   |

----

----

----

----

| PART      II |
|--------------|

----

----

----

American has a secured bank credit facility which consists ofan undrawn $255 million revolving credit facility with a final maturity on June17, 2009, and a fully drawn $440 million term loan facility, with a finalmaturity on December 17, 2010 (the Revolving Facility and the Term LoanFacility, respectively, and collectively, the Credit Facility). On March 30,2007, American paid in full the principal balance of the Revolving Facility andas of December 31, 2007, it remained undrawn.  American’s obligationsunder the Credit Facility are guaranteed by AMR.

----

----

----

|                         |   | Year      Ended December 31, |   |
|------------------------------|--------|------------------------------|--------|
|                         |   | 2007                         |   |   | 2006 |   |
| Revenues:                    |   |                         |   |   |   |   |
| Regional      Affiliates     |   | $                            | 2,470  |   |   | $ | 2,502 |   |
| Other                        |   |                         | 103    |   |   |   | 100 |   |
|                         |   | $                            | 2,573  |   |   | $ | 2,602 |   |
| Expenses:                    |   |                         |   |   |   |   |   |   |
| Regional      payments       |   | $                            | 2,485  |   |   | $ | 2,390 |   |
| Other      incurred expenses |   |                         | 311    |   |   |   | 308 |   |
|                         |   | $                            | 2,796  |   |   | $ | 2,698 |   |

----

----

|                                     | Year      Ended December 31, 2007 |
|------------------------------------------|-----------------------------------|
|                                     | RASM(cents)                       |   |  Y-O-YChange |   |   ASMs (billions) |   |  Y-O-YChange |
|                                     |                              |   |   |   |   |   |   |
| DOT      Domestic                        | 10.5                              |   | 3.0      % |   |   108.5 |   | (2.6)% |
| International                            | 11.1                              |   | 7.4 |   |     61.4 |   | (2.0) |
|    DOT      Latin America | 11.4                              |   | 5.9 |   |     29.6 |   | 0.9 |
|    DOT      Atlantic      | 10.9                              |   | 5.2 |   |     25.0 |   | (0.5) |
|    DOT      Pacific       | 10.2                              |   | 20.2 |   |       6.8 |   | (17.1) |

----

| (in      millions) Operating      Expenses        |   | Year      ended December 31, 2007 |   |   | Change      from 2006 |   |   | Percentage      Change |   |   |
|--------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------|--------|--------|------------------------|--------|--------|
|                                                   |   |                              |   |   |                  |   |   |                   |   |   |
| Wages,      salaries and benefits                      |   | $                                 | 6,132  |   |                  | $      | (70    | )                      |   |   | (1.1 | )% |   |
| Aircraft      fuel                                     |   |                              | 6,011  |   |                  |   | 227    |                   |   |   | 3.9 |   | (a) |
| Regional      payments to AMR Eagle                    |   |                              | 2,284  |   |                  |   | 95     |                   |   |   | 4.3 |   |   |
| Other      rentals and landing fees                    |   |                              | 1,162  |   |                  |   | 8      |                   |   |   | 0.7 |   |   |
| Commissions,      booking fees and credit card expense |   |                              | 1,029  |   |                  |   | (47    | )                      |   |   | (4.4 | ) |   |
| Depreciation      and amortization                     |   |                              | 1,010  |   |                  |   | 43     |                   |   |   | 4.4 |   |   |
| Maintenance,      materials and repairs                |   |                              | 826    |   |                  |   | 55     |                   |   |   | 7.1 |   | (b) |
| Aircraft      rentals                                  |   |                              | 579    |   |                  |   | (8     | )                      |   |   | (1.3 | ) |   |
| Food      service                                      |   |                              | 524    |   |                  |   | 24     |                   |   |   | 4.8 |   |   |
| Other      operating expenses                          |   |                              | 2,574  |   |                  |   | 129    |                   |   |   | 5.3 |   | (c) |
| Total      operating expenses                          |   | $                                 | 22,131 |   |                  | $      | 456    |                   |   |   | 2.1 | % |   |

| (a)   | Aircraft      fuel expense increased primarily due to a 5.6 percent increase in      American’s price per gallon of fuel (net of the impact of fuel hedging) by      a 1.6 percent decrease in American’s fuel  consumption. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Maintenance,      materials and repairs expense increased due to $37 million a heavier      workscope of scheduled airframe maintenance overhauls, repair costs and      volume, and contractual engine repair rates, which are driven be aircraft      age. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Other      operating expenses increased due to charges taken in      2007.  Included in 2007 expenses was a $63 million charge for      the retirement of 24 MD-80 aircraft.   In addition, Other      operating expenses increased due to technology investments and      development, and other costs associated with improving the customer      experience. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

ITEM7(A).                      QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

----

----

|                                                                 | Page     |
|----------------------------------------------------------------------|----------|
|                                                                 |     |
| Report      of Independent Registered Public Accounting Firm         |  37 |
|                                                                 |     |
| Consolidated      Statements of Operations                           |  38 |
|                                                                 |     |
| Consolidated      Balance Sheets                                     | 39-40    |
|                                                                 |     |
| Consolidated      Statements of Cash Flows                           |  41 |
|                                                                 |     |
| Consolidated      Statements of Stockholders’ Equity (Deficit) |  42 |
|                                                                 |     |
| Notes      to Consolidated Financial Statements                      | 43-69    |

----

----

| (in      millions)                                     |   |
|--------------------------------------------------------|--------|
|                                                   |   |   |   |
|                                                   |   | Year      Ended December 31, |   |
|                                                   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Revenues                                               |   |   |   |   |   |   |   |   |   |
| Passenger                                              |   | $ | 18,235 |   |   | $ | 17,862 |   |   | $ | 16,614 |   |
| Regional      Affiliates                               |   |   | 2,470 |   |   |   | 2,502 |   |   |   | 2,148 |   |
| Cargo                                                  |   |   | 825 |   |   |   | 827 |   |   |   | 784 |   |
| Other      revenues                                    |   |   | 1,303 |   |   |   | 1,299 |   |   |   | 1,111 |   |
| Total      operating revenues                          |   |   | 22,833 |   |   |   | 22,490 |   |   |   | 20,657 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Wages,      salaries and benefits                      |   |   | 6,132 |   |   |   | 6,202 |   |   |   | 6,173 |   |
| Aircraft      fuel                                     |   |   | 6,011 |   |   |   | 5,784 |   |   |   | 5,080 |   |
| Regional      payments to AMR Eagle                    |   |   | 2,284 |   |   |   | 2,189 |   |   |   | 2,048 |   |
| Other      rentals and landing fees                    |   |   | 1,162 |   |   |   | 1,154 |   |   |   | 1,145 |   |
| Commissions,      booking fees and credit card expense |   |   | 1,029 |   |   |   | 1,076 |   |   |   | 1,113 |   |
| Depreciation      and amortization                     |   |   | 1,010 |   |   |   | 967 |   |   |   | 977 |   |
| Maintenance,      materials and repairs                |   |   | 826 |   |   |   | 771 |   |   |   | 802 |   |
| Aircraft      rentals                                  |   |   | 579 |   |   |   | 587 |   |   |   | 571 |   |
| Food      service                                      |   |   | 524 |   |   |   | 500 |   |   |   | 500 |   |
| Other      operating expenses                          |   |   | 2,574 |   |   |   | 2,445 |   |   |   | 2,599 |   |
| Total      operating expenses                          |   |   | 22,131 |   |   |   | 21,675 |   |   |   | 21,008 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Income (Loss)                           |   |   | 702 |   |   |   | 815 |   |   |   | (351 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income (Expense)                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                   |   |   | 327 |   |   |   | 275 |   |   |   | 146 |   |
| Interest      expense                                  |   |   | (708 | ) |   |   | (795 | ) |   |   | (712 | ) |
| Interest      capitalized                              |   |   | 20 |   |   |   | 29 |   |   |   | 64 |   |
| Related      party interest – net                |   |   | (85 | ) |   |   | (47 | ) |   |   | (12 | ) |
| Miscellaneous      – net                         |   |   | 100 |   |   |   | (113 | ) |   |   | (27 | ) |
|                                                   |   |   | (346 | ) |   |   | (651 | ) |   |   | (541 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (Loss) Before Income Taxes                 |   |   | 356 |   |   |   | 164 |   |   |   | (892 | ) |
| Income      tax                                        |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      Earnings (Loss)                               |   | $ | 356 |   |   | $ | 164 |   |   | $ | (892 | ) |
|                                                   |   |

----

| (in      millions, except shares and par value)                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                           |   |   |
|                                                                                                                                           |   | December      31, |
|                                                                                                                                           |   | 2007 |   |   | 2006 |
| Assets                                                                                                                                         |   |   |   |   |   |   |   |
|                                                                                                                                           |   |   |   |   |   |
| Current      Assets                                                                                                                            |   |   |   |   |   |
| Cash                                                                                                                                           |   | $ | 145 |   |   | $ | 120 |   |
| Short-term      investments                                                                                                                    |   |   | 4,286 |   |   |   | 4,527 |   |
| Restricted      cash and short-term investments                                                                                                |   |   | 428 |   |   |   | 468 |   |
| Receivables,      less allowance for uncollectibleaccounts      (2007 - $40; 2006 - $44)                                                       |   |   | 1,003 |   |   |   | 957 |   |
| Inventories,      less allowance for obsolescence(2007      - $373; 2006 - $364)                                                               |   |   | 544 |   |   |   | 465 |   |
| Fuel      derivative contracts                                                                                                                 |   |   | 416 |   |   |   | 28 |   |
| Other      current assets                                                                                                                      |   |   | 204 |   |   |   | 185 |   |
| Total      current assets                                                                                                                      |   |   | 7,026 |   |   |   | 6,750 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |   |
| Equipment      and Property                                                                                                                    |   |   |   |   |   |   |   |   |   |
| Flight      equipment, at cost                                                                                                                 |   |   | 18,979 |   |   |   | 18,913 |   |
| Less      accumulated depreciation                                                                                                             |   |   | 7,837 |   |   |   | 7,389 |   |
|                                                                                                                                           |   |   | 11,142 |   |   |   | 11,524 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |   |
| Purchase      deposits for flight equipment                                                                                                    |   |   | 239 |   |   |   | 177 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |   |
| Other      equipment and property, at cost                                                                                                     |   |   | 5,064 |   |   |   | 4,932 |   |
| Less      accumulated depreciation                                                                                                             |   |   | 2,698 |   |   |   | 2,589 |   |
|                                                                                                                                           |   |   | 2,366 |   |   |   | 2,343 |   |
|                                                                                                                                           |   |   | 13,747 |   |   |   | 14,044 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |   |
| Equipment      and Property Under Capital Leases                                                                                               |   |   |   |   |   |   |   |   |   |
| Flight      equipment                                                                                                                          |   |   | 1,698 |   |   |   | 1,743 |   |
| Other      equipment and property                                                                                                              |   |   | 215 |   |   |   | 215 |   |
|                                                                                                                                           |   |   | 1,913 |   |   |   | 1,958 |   |
| Less      accumulated amortization                                                                                                             |   |   | 1,151 |   |   |   | 1,094 |   |
|                                                                                                                                           |   |   | 762 |   |   |   | 864 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |   |
| Other      Assets                                                                                                                              |   |   |   |   |   |   |   |   |   |
| Route      acquisition costs, slots and airport operating and gate lease rights, less      accumulated amortization (2007 - $342; 2006 - $317) |   |   | 1,135 |   |   |   | 1,143 |   |
| Other      assets                                                                                                                              |   |   | 2,715 |   |   |   | 3,049 |   |
|                                                                                                                                           |   |   | 3,850 |   |   |   | 4,192 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                                                                                              |   | $ | 25,385 |   |   | $ | 25,850 |   |
|                                                                                                                                           |

----

| (in      millions, except shares and par value)                                       |
|---------------------------------------------------------------------------------------|
|                                                                                  |   |   |
|                                                                                  |   | December      31, |
|                                                                                  |   | 2007 |   |   | 2006 |
| Liabilities      and Stockholder’s Equity (Deficit)                             |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |
| Current      Liabilities                                                              |   |   |   |   |   |
| Accounts      payable                                                                 |   | $ | 1,083 |   |   | $ | 987 |   |
| Accrued      salaries and wages                                                       |   |   | 520 |   |   |   | 516 |   |
| Accrued      liabilities                                                              |   |   | 1,608 |   |   |   | 1,648 |   |
| Air      traffic liability                                                            |   |   | 3,986 |   |   |   | 3,782 |   |
| Payable      to affiliates                                                            |   |   | 1,610 |   |   |   | 1,071 |   |
| Current      maturities of long-term debt                                             |   |   | 382 |   |   |   | 1,012 |   |
| Current      obligations under capital leases                                         |   |   | 147 |   |   |   | 101 |   |
| Total      current liabilities                                                        |   |   | 9,336 |   |   |   | 9,117 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Long-Term      Debt, Less Current Maturities                                          |   |   | 6,600 |   |   |   | 7,787 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Obligations      Under Capital Leases,Less      Current Obligations                   |   |   | 680 |   |   |   | 824 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Other      Liabilities and Credits                                                    |   |   |   |   |   |   |   |   |   |
| Deferred      gains                                                                   |   |   | 319 |   |   |   | 370 |   |
| Pension      and postretirement benefits                                              |   |   | 3,620 |   |   |   | 5,340 |   |
| Other      liabilities and deferred credits                                           |   |   | 3,386 |   |   |   | 3,478 |   |
|                                                                                  |   |   | 7,325 |   |   |   | 9,188 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Commitments      and Contingencies                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Stockholder’s      Equity (Deficit)                                             |   |   |   |   |   |   |   |   |   |
| Common      stock - $1 par value;1,000      shares authorized, issued and outstanding |   |   | - |   |   |   | - |   |
| Additional      paid-in capital                                                       |   |   | 3,862 |   |   |   | 3,667 |   |
| Accumulated      other comprehensive income (loss)                                    |   |   | 560 |   |   |   | (1,399 | ) |
| Accumulated      deficit                                                              |   |   | (2,978 | ) |   |   | (3,334 | ) |
|                                                                                  |   |   | 1,444 |   |   |   | (1,066 | ) |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Total      Liabilities and Stockholder’s Equity (Deficit)                       |   | $ | 25,385 |   |   | $ | 25,850 |   |
|                                                                                  |

----

| (in      millions)                                                                                           |   |
|--------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                         |   | Year      Ended December 31, |   |
|                                                                                                         |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Cash      Flow from Operating Activities:                                                                    |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                                                                       |   | $ | 356 |   |   | $ | 164 |   |   | $ | (892 | ) |
| Adjustments      to reconcile net income (loss) to net cash provided (used) by operating      activities:    |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                                                 |   |   | 850 |   |   |   | 835 |   |   |   | 849 |   |
| Amortization                                                                                                 |   |   | 160 |   |   |   | 132 |   |   |   | 128 |   |
| Equity      based stock compensation                                                                         |   |   | 123 |   |   |   | 129 |   |   |   | - |   |
| Provisions      for asset impairments and restructuring charges                                              |   |   | 63 |   |   |   | - |   |   |   | 134 |   |
| Gain      on sale of investments                                                                             |   |   | (138 | ) |   |   | - |   |   |   | - |   |
| Redemption      payments under operating leases for special facility revenue      bonds                      |   |   | (100 | ) |   |   | (28 | ) |   |   | (104 | ) |
| Change      in assets and liabilities:                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in receivables                                                                      |   |   | (48 | ) |   |   | 11 |   |   |   | (146 | ) |
| Decrease      (increase) in inventories                                                                      |   |   | (109 | ) |   |   | (5 | ) |   |   | (53 | ) |
| Increase      (decrease) in accounts payableand      accrued liabilities                                     |   |   | 340 |   |   |   | (206 | ) |   |   | 158 |   |
| Increase      in air traffic liability                                                                       |   |   | 203 |   |   |   | 168 |   |   |   | 432 |   |
| Increase      in other liabilities and deferred credits                                                      |   |   | (134 | ) |   |   | 380 |   |   |   | 196 |   |
| Other,      net                                                                                              |   |   | (40 | ) |   |   | 17 |   |   |   | 30 |   |
| Net      cash provided by operating activities                                                               |   |   | 1,526 |   |   |   | 1,597 |   |   |   | 732 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flow from Investing Activities:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      expenditures, including purchase deposits onflight      equipment                               |   |   | (670 | ) |   |   | (508 | ) |   |   | (381 | ) |
| Net      decrease in short-term investments                                                                  |   |   | 233 |   |   |   | (890 | ) |   |   | (850 | ) |
| Net      decrease (increase) in restricted cash and      short-term     investments |   |   | 48 |   |   |   | 42 |   |   |   | (32 | ) |
| Proceeds      from sale of equipment and property and   investments                           |   |   | 220 |   |   |   | 31 |   |   |   | 30 |   |
| Other                                                                                                        |   |   | 5 |   |   |   | (8 | ) |   |   | 1 |   |
| Net      cash used for investing activities                                                                  |   |   | (164 | ) |   |   | (1,333 | ) |   |   | (1,232 | ) |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flow from Financing Activities:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Payments      on long-term debt and capital lease obligations                                                |   |   | (1,930 | ) |   |   | (955 | ) |   |   | (870 | ) |
| Proceeds      from:                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Reimbursement      from construction reserve account                                                         |   |   | 59 |   |   |   | 145 |   |   |   | - |   |
| Issuance      of long-term debt and special facility bond   transactions                      |   |   | - |   |   |   | - |   |   |   | 934 |   |
| Securitization      transactions                                                                             |   |   | - |   |   |   | - |   |   |   | 133 |   |
| Funds      transferred from affiliates, net                                                                  |   |   | 533 |   |   |   | 533 |   |   |   | 319 |   |
| Net      cash provided by (used in) financing activities                                                     |   |   | (1,338 | ) |   |   | (277 | ) |   |   | 516 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash                                                                         |   |   | 25 |   |   |   | (13 | ) |   |   | 16 |   |
| Cash      at beginning of year                                                                               |   |   | 120 |   |   |   | 133 |   |   |   | 117 |   |
| Cash      at end of year                                                                                     |   | $ | 145 |   |   | $ | 120 |   |   | $ | 133 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Activities      Not Affecting Cash                                                                           |   |
| Funding      of construction and debt service reserve accounts                                               |   | $ | - |   |   | $ | - |   |   | $ | 284 |   |
| Capital      lease obligations incurred                                                                      |   | $ | - |   |   | $ | - |   |   | $ | 13 |   |
|                                                                                                         |   |

| (in      millions)                                                                                |   |                                                                                  |
|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|
|                                                                                              |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   CommonStock                                                               |   |  AdditionalPaid-inCapital |   | AccumulatedOther      Comprehensive Income (Loss ) |   |  AccumulatedDeficit |   |    Total |   |   |   |
| Balance      at January 1, 2005                                                                   |   | -                                                                                     |   | 3,273 |   | (772) |   |    (2,606) |   | (105) |   |   |   |
|                                                                                              |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                                     |   | -                                                                                     |   | - |   | - |   | (892) |   | (892) |   |   |   |
| Minimum      pension liability                                                                    |   | -                                                                                     |   | - |   | (379) |   | - |   | (379) |   |   |   |
| Changes      in fair value of derivative financial instruments                                    |   |  -                                                                               |   |  - |   |  58 |   |  - |   |  58 |   |   |   |
| Unrealized      gain on investments                                                               |   | -                                                                                     |   | - |   | 6 |   | - |   | 6 |   |   |   |
| Total      comprehensive loss                                                                     |   |                                                                                  |   |   |   |   |   |   |   | (1,207) |   |   |   |
|                                                                                              |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Transactions      with Parent (Note 13)                                                           |   | -                                                                                     |   | 133 |   | - |   | - |   | 133 |   |   |   |
| Balance      at December 31, 2005                                                                 |   | -                                                                                     |   | 3,406 |   | (1,087) |   | (3,498) |   | (1,179) |   |   |   |
|                                                                                              |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                                                 |   | -                                                                                     |   | - |   | - |   | 164 |   | 164 |   |   |   |
| Pension      liability                                                                            |   | -                                                                                     |   | - |   | 748 |   | - |   | 748 |   |   |   |
| Changes      in fair value of derivative financial instruments                                    |   |  -                                                                               |   |  - |   |  (62) |   |  - |   |  (62) |   |   |   |
| Total      comprehensive loss                                                                     |   |                                                                                  |   |   |   |   |   |   |   | 850 |   |   |   |
|                                                                                              |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment      resulting from adoption of SFAS 158                                               |   |  -                                                                               |   |  - |   |  (998) |   |  - |   |  (998) |   |   |   |
| Reclassification  and      amortization of stock compensation plans                     |   |  -                                                                               |   |  261 |   |  - |   |  - |   |  261 |   |   |   |
| Balance      at December 31, 2006                                                                 |   | -                                                                                     |   | $    3,667 |   | $       (1,399) |   | $(3,334) |   | $(1,066) |   |   |   |
| Net      earnings                                                                                 |   | -                                                                                     |   | - |   | - |   | 356 |   | 356 |   |   |
| Pension,      retiree medical and other liability                                                 |   |                                                                                  |   |   |   |                   1,744 |   |   |   |             1,744 |   |   |
| Changes      in fair value of derivative financial instruments                                    |   |               - |   |                    - |   |                       221 |   |   |   |                 221 |   |   |
| Unrealized      gain on investments                                                               |   | -                                                                                     |   |                   - |   |                        (6) |   |   |   |                  (6) |   |   |
|            Total      comprehensive income |   |                                                                                  |   |   |   |   |   |   |   |             1,251 |   |   |
|                                                                                              |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Reclassification      and amortization of stock compensation plans                                |   |               - |   |              195 |   |                          - |   |                  - |   |  195  |   |   |
| Balance      at December 31, 2007                                                                 |   | $             -                                    |   | $       3,862 |   | $                 560 |   | $    (2,978) |   | $         1,444 |   |   |

----

----

|                                                             |  Depreciable      Life                                                                                                               |
|------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                             |                                                                                                                                      |
| American      jet aircraft and engines                           | 20      – 30 years                                                                                                                  |
| Major      rotable parts, avionics and assemblies                | Life      of equipment to which applicable                                                                                                |
| Improvements      to leased flight equipment                     | Lesser      of lease term or expected useful life                                                                                         |
| Buildings      and improvements (principally onleased      land) | 5 –      30 years or term of lease, including estimated renewal options when      renewal is economically compelled at key airports |
| Furniture,      fixtures and other equipment                     | 3 –      10 years                                                                                                                   |
| Capitalized      software                                        | 3 –      10 years                                                                                                                   |

----

----

|                                                                                                                 |   | Aircraft      Charges |   |   | Facility      Exit Costs |   |   | Employee      Charges |   |   | Other  |   |   | Total  |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
| Remaining      accrual      at           January      1, 2005 |   | $                     | 126    |   |                     | $      | 26     |                  |   | $      | 35     |   |   | $      | -      |   |   | $ | 187 |   |
| Restructuring      charges                                                                                           |   |                  | 155    |   |                     |   | 19     |                  |   |   | -      |   |   |   | (37    | ) |   |   | 137 |   |
| Adjustments                                                                                                          |   |                  | -      |   |                     |   | (2     | )                     |   |   | -      |   |   |   | -      |   |   |   | (2 | ) |
| Non-cash      charges                                                                                                |   |                  | (119   | )      |                     |   | -      |                  |   |   | -      |   |   |   | 37     |   |   |   | (82 | ) |
| Payments                                                                                                             |   |                  | (12    | )      |                     |   | (7     | )                     |   |   | (35    | )      |   |   | -      |   |   |   | (54 | ) |
| Remaining      accrual at      December 31,      2005                                  |   |                  | 150    |   |                     |   | 36     |                  |   |   | -      |   |   |   | -      |   |   |   | 186 |   |
| Adjustments                                                                                                          |   |                  | (3     | )      |                     |   | (16    | )                     |   |   | -      |   |   |   | -      |   |   |   | (19 | ) |
| Payments                                                                                                             |   |                  | (21    | )      |                     |   | (1     | )                     |   |   | -      |   |   |   | -      |   |   |   | (22 | ) |
| Remaining      accrual at      December 31,      2006                                  |   |                  | 126    |   |                     |   | 19     |                  |   |   | -      |   |   |   | -      |   |   |   | 145 |   |
| Restructuring      charges                                                                                           |   |                  | 63     |   |                     |   | -      |                  |   |   | -      |   |   |   | -      |   |   |   | 63 |   |
| Non-cash      charges                                                                                                |   |                  | (53    | )      |                     |   | -      |                  |   |   | -      |   |   |   | -      |   |   |   | (53 | ) |
| Payments                                                                                                             |   |                  | (12    | )      |                     |   | (1     | )                     |   |   | -      |   |   |   | -      |   |   |   | (13 | ) |
| Remaining      accrual at      December 31,      2007                                  |   | $                     | 124    |   |                     | $      | 18     |                  |   | $      | -      |   |   | $      | -      |   |   | $ | 142 |   |
|                                                                                                                 |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                         |   | December      31, |   |
|----------------------------------------------|--------|-------------------|--------|
|                                         |   | 2007              |   |   | 2006 |   |
|                                         |   |              |   |   |   |   |
| Overnight      investments and time deposits |   | $                 | 488    |   |   | $ | 29 |   |
| Corporate      and bank notes                |   |              | 3,781  |   |   |   | 4,476 |   |
| U.      S. government agency mortgages       |   |              | 0      |   |   |   | 7 |   |
| U.      S. government agency notes           |   |              | 17     |   |   |   | 15 |   |
|                                         |   |              |   |   |   |   |   |   |
|                                         |   | $                 | 4,286  |   |   | $ | 4,527 |   |

| Due      in one year or less              |   | $      | 3,520  |   |
|-------------------------------------------|--------|--------|--------|--------|
| Due      between one year and three years |   |   | 766    |   |
| Due      after three years                |   |   | 0      |   |
|                                      |   |   |   |   |
|                                      |   | $      | 4,286  |   |

----

----

|  Year      Ending December 31,              |   | CapitalLeases |   |   | OperatingLeases |   |   |   |      |
|--------------------------------------------------|--------|---------------|--------|--------|-----------------|--------|--------|--------|-----------|
|                                             |   |          |   |   |            |   |   |   |      |
| 2008                                             |   | $             | 243    |   |            | $      | 1,022  |   |      |   |   |
| 2009                                             |   |          | 180    |   |            |   | 923    |   |      |   |   |
| 2010                                             |   |          | 144    |   |            |   | 859    |   |      |   |   |
| 2011                                             |   |          | 146    |   |            |   | 853    |   |      |   |   |
| 2012                                             |   |          | 97     |   |            |   | 671    |   |      |   |   |
| 2013      and thereafter                         |   |          | 559    |   |            |   | 5,781  |   |      |   |   |
|                                             |   |          |   |   |            |   |   |   |      |   |   |
|                                             |   |          | 1,369  |   |            | $      | 10,109 |   |  (1) |   |   |   |
|                                             |   |          |   |   |            |   |   |   |      |   |   |   |
| Less      amount representing interest           |   |          | 523    |   |            |   |   |   |      |   |   |   |
|                                             |   |          |   |   |            |   |   |   |      |   |   |   |
| Present      value of net minimum lease payments |   | $             | 846    |   |            |   |   |   |      |   |   |   |

|   | (1) | As      of December 31, 2007, included in Accrued liabilities and Other      liabilities and deferred credits on the accompanying consolidated balance      sheet is approximately $1.3 billion relating to rent expense being      recorded in advance of future operating lease  payments. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                              |   | December      31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                                                              |   | 2007              |   |   | 2006 |   |
|                                                                                                                              |   |              |   |   |   |   |
| Secured      variable and fixed rate indebtedness due through 2021(effective      rates from 5.41% - 11.36% at December 31, 2007) |   | $                 | 2,345  |   |   | $ | 3,366 |   |
| Enhanced      equipment trust certificates due through 2012(rates      from 3.86% - 12.00% at December 31, 2007)                  |   |              | 2,482  |   |   |   | 2,968 |   |
| 6.0%      - 8.5% special facility revenue bonds due through 2036                                                                  |   |              | 1,688  |   |   |   | 1,697 |   |
| Credit      facility agreement due through 2010(effective      rate of 6.45% at December 31, 2007)                                |   |              | 440    |   |   |   | 740 |   |
| Other                                                                                                                             |   |              | 27     |   |   |   | 28 |   |
|                                                                                                                              |   |              | 6,982  |   |   |   | 8,799 |   |
|                                                                                                                              |   |              |   |   |   |   |   |   |
| Less      current maturities                                                                                                      |   |              | 382    |   |   |   | 1,012 |   |
|                                                                                                                              |   |              |   |   |   |   |   |   |
| Long-term      debt, less current maturities                                                                                      |   | $                 | 6,600  |   |   | $ | 7,787 |   |

----

----

|                                              |   | December      31,   |   |
|---------------------------------------------------|--------|---------------------|--------|
|                                              |   | 2007                |   |   | 2006 |   |
|                                              |   | Carrying      Value |   |   | FairValue |   |   | Carrying      Value |   |   | FairValue |   |
|                                              |   |                |   |   |   |   |   |   |   |   |   |   |
| Secured      variable and fixed rate indebtedness |   | $                   | 2,345  |   |   | $ | 2,185 |   |   | $ | 3,366 |   |   | $ | 3,418 |   |
| Enhanced      equipment trust certificates        |   |                | 2,482  |   |   |   | 2,472 |   |   |   | 2,968 |   |   |   | 3,068 |   |
| 6.0%      - 8.5% special facility revenue bonds   |   |                | 1,688  |   |   |   | 1,801 |   |   |   | 1,697 |   |   |   | 1,978 |   |
| Credit      facility agreement                    |   |                | 440    |   |   |   | 423 |   |   |   | 740 |   |   |   | 743 |   |
| Other                                             |   |                | 27     |   |   |   | 28 |   |   |   | 28 |   |   |   | 28 |   |
|                                              |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | $                   | 6,982  |   |   | $ | 6,909 |   |   | $ | 8,799 |   |   | $ | 9,235 |   |

----

| Unrecognized      Tax Benefit at January 1, 2007                          |   | $      | 40 |   |
|---------------------------------------------------------------------------|--------|--------|----|--------|
|    Decreases      due to settlements with taxing authority |   |   | (2 | )      |
| Unrecognized      Tax Benefit at December 31, 2007                        |   | $      | 38 |   |

|                                                               |   | Year      Ended December 31, |   |
|--------------------------------------------------------------------|--------|------------------------------|--------|
|                                                               |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                                                               |   |                         |   |   |   |   |   |   |   |
| Statutory      income tax provision expense/(benefit)              |   | $                            | 125    |   |   | $ | 57 |   |   | $ | (312 | ) |
| State      income tax expense/(benefit), net of federal tax effect |   |                         | 4      |   |   |   | 8 |   |   |   | (18 | ) |
| Meal      expense                                                  |   |                         | 7      |   |   |   | 6 |   |   |   | 7 |   |
| Change      in valuation allowance                                 |   |                         | (130   | ) |   |   | (77 | ) |   |   | 318 |   |
| Other,      net                                                    |   |                         | (6     | ) |   |   | 6 |   |   |   | 5 |   |
|                                                               |   |                         |   |   |   |   |   |   |   |   |   |   |
| Income      tax provision (benefit)                                |   | $                            | -      |   |   | $ | - |   |   | $ | - |   |

----

|                                              |   | December      31, |   |
|---------------------------------------------------|--------|-------------------|--------|
|                                              |   | 2007              |   |   | 2006 |   |
| Deferred      tax assets:                         |   |              |   |   |   |   |
| Postretirement      benefits other than pensions  |   | $                 | 1,160  |   |   | $ | 1,135 |   |
| Rent      expense                                 |   |              | 417    |   |   |   | 470 |   |
| Alternative      minimum tax credit carryforwards |   |              | 544    |   |   |   | 544 |   |
| Operating      loss carryforwards                 |   |              | 1,774  |   |   |   | 1,948 |   |
| Frequent      flyer obligation                    |   |              | 307    |   |   |   | 320 |   |
| Gains      from lease transactions                |   |              | 95     |   |   |   | 132 |   |
| Pension                                           |   |              | 404    |   |   |   | 824 |   |
| Other                                             |   |              | 646    |   |   |   | 664 |   |
|    Total      deferred tax assets  |   |              | 5,347  |   |   |   | 6,037 |   |
|    Valuation      allowance        |   |              | (1,129 | ) |   |   | (1,773 | ) |
| Net      deferred tax assets                      |   |              | 4,218  |   |   |   | 4,264 |   |
|                                              |   |              |   |   |   |   |   |   |
| Deferred      tax liabilities:                    |   |              |   |   |   |   |   |   |
| Accelerated      depreciation and amortization    |   |              | (3,981 | ) |   |   | (3,994 | ) |
| Other                                             |   |              | (237   | ) |   |   | (270 | ) |
| Total      deferred tax liabilities               |   |              | (4,218 | ) |   |   | (4,264 | ) |
|                                              |   |              |   |   |   |   |   |   |
| Net      deferred tax liability                   |   | $                 | -      |   |   | $ | - |   |

----

----

|                                                                                                                                  | 2005   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                  |   |   |   |
| Net      earnings (loss), as reported                                                                                                 |   | $ | (892 | ) |   |
| Add:  Stock-based      employee compensation expense included in reported net earnings      (loss)                          |   |   |   127 |   |   |
| Deduct:  Total      stock-based employee compensation expense determined under fair value      based methods for all awards |   |   | (169 | ) |   |
| Pro      forma net earnings (loss)                                                                                                    |   | $ | (934 | ) |   |
|                                                                                                                                  |   |   |   |   |   |

|                          |   | 2007                |   |   | 2006                |   |   | 2005                |   |
|-------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|---------------------|--------|
|                          |   |                |   |   |                |   |   |                |   |
| Expected      volatility      |   | 49.7%      to 51.6% |   |   | 52.5%      to 55.0% |   |   |                | 55.0   | % |
| Expected      term (in years) |   |                | 4.0    |   |                |   | 4.0    |                |   |   | 4.0 |   |
| Risk-free      rate           |   | 4.43%      to 5.03% |   |   | 4.35%      to 5.07% |   |   | 3.71%      to 3.98% |   |
| Annual      forfeiture rate   |   |                | 10.0   | %      |                |   | 10.0   | %                   |   |   | 0.0 | % |

----

|                                                                                          |   |                            |              |   |                                     |   |        |                      |   |   |                                 |   |
|-----------------------------------------------------------------------------------------------|--------|---------------------------------|-------------------|--------|------------------------------------------|--------|-------------|---------------------------|--------|--------|--------------------------------------|--------|
|                                                                                          |   |                            |              |   |                                     |   |        |                      |   |   |                                 |   |
|                                                                                          |   | LTIP      Plans                 |              |   | The      Pilot Plan and the 2003 Plan    |   |
|                                                                                          |   |    Options/SSARs |              |   | Weighted      AverageExercise      Price |   |        |    Options |   |   | Weighted      Average Exercise Price |   |
|                                                                                          |   |                            |              |   |                                     |   |        |                      |   |   |                                 |   |
|  Outstanding      at January 1                                                           |   |                            | 15,602,328        |   |                                     | $      | 27.03       |                      |   |   | 21,559,434                           |   |   | $ | 7.89 |   |
| Granted                                                                                       |   |                            | 697,940           |   |                                     |   | 28.53       |                      |   |   | -                                    |   |   |   | - |   |
| Exercised                                                                                     |   |                            | (4,230,379        | )      |                                     |   | 25.16       |                      |   |   | (7,015,519                           | )      |   |   | 12.19 |   |
| Forfeited      or Expired                                                                     |   |                            | (225,274          | )      |                                     |   | 28.48       |                      |   |   | (267,862                             | )      |   |   | 13.85 |   |
| Outstanding      at December 31                                                               |   |                            | 11,844,615        |   |                                     |   |  27.76 |                      |   |   | 14,276,053                           |   |   |   |  5.66 |   |
|  Exercisable      at December 31                                                         |   |                            | 9,774,015         |   |                                     |   |  29.29 |                      |   |   | 13,381,132                           |   |   |   |  5.29 |   |
|  Weighted      Average Remaining Contractual Term of Options Outstanding (in      years) |   |                            |     3.9 |   |                                     |   |        |                      |   |   |     5.4                    |   |   |   |   |   |
|  Aggregate      Intrinsic Value of Options Outstanding                                   |   | $                               |  3,146,591   |   |                                     |   |        |                      |   | $      |  119,545,812                    |   |   |   |   |   |

|                                               |   |                |       |   | Weighted                                                        |   |
|----------------------------------------------------|--------|---------------------|------------|--------|-----------------------------------------------------------------|--------|
|                                               |   |  Options/SSARs |       |   | Average          Grant Date Fair Value |   |
|                                               |   |                |       |   |                                                            |   |
|  Outstanding      at January 1                |   |                | 3,952,105  |   |                                                            | $      | 6.98 |   |
| Granted                                            |   |                | 697,940    |   |                                                            |   | 12.63 |   |
| Vested                                             |   |                | (1,575,904 | )      |                                                            |   | 7.37 |   |
| Forfeited                                          |   |                | (108,620   | )      |                                                            |   | 8.02 |   |
|          Outstanding at December 31 |   |                | 2,965,521  |   |                                                            |   |  8.07 |   |

----

|                                               |   |         |       |                                              |                                 |
|----------------------------------------------------|--------|--------------|------------|--------------------------------------------------------|--------------------------------------|
|                                               |   |  Awards |       | Weighted      Average  Remaining Contractual Term |  Aggregate      Intrinsic Value |
|                                               |   |         |       |                                                   |                                 |
| Outstanding      at January 1                      |   |         | 4,195,589  |                                                   |                                 |   |
| Reclassified      from liability awards            |   |         | 2,264,203  |                                                   |                                 |   |
| Granted                                            |   |         | 1,524,170  |                                                   |                                 |   |
| Settled                                            |   |         | (2,441,297 | )                                                      |                                 |   |
| Forfeited      or Expired                          |   |         | (142,224   | )                                                      |                                 |   |
|          Outstanding at December 31 |   |         | 5,400,441  |                                                   |  1.1                            |  $   82,443,348 |

|                                               |   |         |      |                                            |                                 |
|----------------------------------------------------|--------|--------------|-----------|-------------------------------------------------|--------------------------------------|
|                                               |   |  Shares |      | Weighted      AverageRemaining Contractual Term |  Aggregate      Intrinsic Value |
|                                               |   |         |      |                                            |                                 |
| Outstanding      at January 1                      |   |         | 3,476,039 |                                            |                                 |   |
| Reclassified      from liability awards            |   |         | 681,115   |                                            |                                 |   |
| Granted                                            |   |         | 462,980   |                                            |                                 |   |
| Settled                                            |   |         | (882,128  | )                                               |                                 |   |
| Forfeited      or Expired                          |   |         | (69,209   | )                                               |                                 |   |
|          Outstanding at December 31 |   |         | 3,668,797 |                                            |  4.3                            |  $   51,473,223 |

----

|                                                           |   | Prior      to adopting SFAS 158 |   |   | Effect      of adoptingSFAS      158 |   |   | As      Reported at December 31, 2006 |   |
|----------------------------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------------|--------|--------|---------------------------------------|--------|
|                                                           |   |                            |   |   |                                 |   |   |                                  |   |
| Intangible      asset (pension)                                |   | $                               | 118    |   |                                 | $      | (118   | )                                     |   | $ | - |   |
| Accrued      pension and postretirementbenefits      liability |   |                            | 4,657  |   |                                 |   | 880    |                                  |   |   | 5,537 |   |
| Total      liabilities                                         |   |                            | 26,036 |   |                                 |   | 880    |                                  |   |   | 26,916 |   |
|                                                           |   |                            |   |   |                                 |   |   |                                  |   |   |   |   |
| Accumulated      other comprehensive loss                      |   |                            | (458   | )      |                                 |   | (998   | )                                     |   |   | (1,456 | ) |
| Total      stockholders’ equity (deficit)                |   |                            | (68    | )      |                                 |   | (998   | )                                     |   |   | (1,066 | ) |
|                                                           |   |                            |   |   |                                 |   |   |                                  |   |   |   |   |

----

|                                      |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|-------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                      |   | 2007                  |   |   | 2006                                    |   |   | 2007 |   |   | 2006 |   |
|                                      |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Reconciliation of      benefit obligation |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Obligation      at January 1              |   | $                     | 11,048 |   |                                    | $      | 11,003 |   |   | $ | 3,256 |   |   | $ | 3,384 |   |
| Service      cost                         |   |                  | 370    |   |                                    |   | 399 |   |   |   | 71 |   |   |   | 78 |   |
| Interest      cost                        |   |                  | 672    |   |                                    |   | 641 |   |   |   | 194 |   |   |   | 194 |   |
| Actuarial      (gain) loss                |   |                  | (1,021 | )      |                                    |   | (390 | ) |   |   | (693 | ) |   |   | (212 | ) |
| Plan      amendments                      |   |                  | -      |   |                                    |   | - |   |   |   | - |   |   |   | (27 | ) |
| Benefit      payments                     |   |                  | (618   | )      |                                    |   | (605 | ) |   |   | (156 | ) |   |   | (161 | ) |
|                                      |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Obligation      at December 31            |   | $                     | 10,451 |   |                                    | $      | 11,048 |   |   | $ | 2,672 |   |   | $ | 3,256 |   |

|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Reconciliation of fair      value of plan assets |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at January 1      |   | $      | 8,565  |   |   | $      | 7,778  |   |   | $      | 202    |   |   | $ | 161 |   |
| Actual      return on plan assets                |   |   | 766    |   |   |   | 1,063  |   |   |   | 9      |   |   |   | 31 |   |
| Employer      contributions                      |   |   | 386    |   |   |   | 329    |   |   |   | 168    |   |   |   | 171 |   |
| Benefit      payments                            |   |   | (618   | )      |   |   | (605   | )      |   |   | (155   | )      |   |   | (161 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at December 31    |   | $      | 9,099  |   |   | $      | 8,565  |   |   | $      | 224    |   |   | $ | 202 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Funded      status at December 31                |   | $      | (1,352 | )      |   | $      | (2,483 | )      |   | $      | (2,448 | )      |   | $ | (3,054 | ) |

|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Amounts recognized in      theconsolidated balance      sheets |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      liability                                         |   | $      | 6      |   |   | $      | 8      |   |   | $      | 170    |   |   | $ | 187 |   |
| Noncurrent      liability                                      |   |   | 1,346  |   |   |   | 2,475  |   |   |   | 2,278  |   |   |   | 2,867 |   |
|                                                           |   | $      | 1,352  |   |   | $      | 2,483  |   |   | $      | 2,448  |   |   | $ | 3,054 |   |
|  Amounts recognized      inother comprehensive      loss  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      actuarial loss (gain)                                 |   | $      | 245    |   |   | $      | 1,310  |   |   | $      | (605   | )      |   | $ | 70 |   |
| Prior      service cost (credit)                               |   |   | 137    |   |   |   | 153    |   |   |   | (65    | )      |   |   | (77 | ) |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | $      | 382    |   |   | $      | 1,463  |   |   | $      | (670   | )      |   | $ | (7 | ) |

| Projected      benefit obligation (PBO)                   |   | $      | 10,451 |   |   | $      | 11,048 |   |   | $      | -     |   |   | $      | -     |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|-------|--------|
| Accumulated      benefit obligation (ABO)                 |   |   | 9,486  |   |   |   | 10,153 |   |   |   | -     |   |   |   | -     |   |
| Accumulated      postretirement benefit obligation (APBO) |   |   | -      |   |   |   | -      |   |   |   | 2,672 |   |   |   | 3,256 |   |
| Fair      value of plan assets                            |   |   | 9,099  |   |   |   | 8,565  |   |   |   | 224   |   |   |   | 202   |   |
| ABO      less fair value of plan assets                   |   |   | 387    |   |   |   | 1,588  |   |   |   | -     |   |   |   | -     |   |

|                                                     |   | Pension      Benefits |   |
|----------------------------------------------------------|--------|-----------------------|--------|
|                                                     |   | 2007                  |   |   | 2006 |   |   | 2005 |   |
|                                                     |   |                  |   |   |   |   |   |   |   |
| Components of net      periodic benefit cost             |   |                  |   |   |   |   |   |   |   |
| Defined      benefit plans:                              |   |                  |   |   |   |   |   |   |   |
| Service      cost                                        |   | $                     | 370    |   |   | $ | 399 |   |   | $ | 372 |   |
| Interest      cost                                       |   |                  | 672    |   |   |   | 641 |   |   |   | 611 |   |
| Expected      return on assets                           |   |                  | (747   | ) |   |   | (669 | ) |   |   | (658 | ) |
| Amortization      of:                                    |   |                  |   |   |   |   |   |   |   |   |   |   |
| Transition      asset                                    |   |                  | -      |   |   |   | (1 | ) |   |   | (1 | ) |
| Prior      service cost                                  |   |                  | 16     |   |   |   | 16 |   |   |   | 16 |   |
| Unrecognized      net loss                               |   |                  | 25     |   |   |   | 81 |   |   |   | 52 |   |
|                                                     |   |                  |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost for defined benefit plans |   |                  | 336    |   |   |   | 467 |   |   |   | 392 |   |
|                                                     |   |                  |   |   |   |   |   |   |   |   |   |   |
| Defined      contribution plans                          |   |                  | 151    |   |   |   | 150 |   |   |   | 154 |   |
|                                                     |   |                  |   |   |   |   |   |   |   |   |   |   |
|                                                     |   | $                     | 487    |   |   | $ | 617 |   |   | $ | 546 |   |

|                                         |   | Retiree      Medical and Other Benefits |   |
|----------------------------------------------|--------|-----------------------------------------|--------|
|                                         |   | 2007                                    |   |   | 2006 |   |   | 2005 |   |
|                                         |   |                                    |   |   |   |   |   |   |   |
| Components of net      periodic benefit cost |   |                                    |   |   |   |   |   |   |   |
| Service      cost                            |   | $                                       | 70     |   |   | $ | 78 |   |   | $ | 75 |   |
| Interest      cost                           |   |                                    | 194    |   |   |   | 194 |   |   |   | 197 |   |
| Expected      return on assets               |   |                                    | (18    | ) |   |   | (15 | ) |   |   | (14 | ) |
| Amortization      of:                        |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Prior      service cost                      |   |                                    | (13    | ) |   |   | (10 | ) |   |   | (10 | ) |
| Unrecognized      net loss (gain)            |   |                                    | (7     | ) |   |   | 1 |   |   |   | 2 |   |
|                                         |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost               |   | $                                       | 226    |   |   | $ | 248 |   |   | $ | 250 |   |

----

|                                                                                           |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                                                                           |   | 2007                  |   |   | 2006                                    |   |   | 2007 |   |   | 2006 |   |
|                                                                                           |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Weighted-average      assumptions used to determine benefit obligations as of December      31 |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Discount      rate                                                                             |   |                  | 6.50   | %      |                                    |   | 6.00 | % |   |   | 6.50 | % |   |   | 6.00 | % |
| Salary      scale (ultimate)                                                                   |   |                  | 3.78   |   |                                    |   | 3.78 |   |   |   | - |   |   |   | - |   |

|                                                                                                               |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                                                                                               |   | 2007                  |   |   | 2006                                    |   |   | 2007 |   |   | 2006 |   |
|                                                                                                               |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Weighted-average      assumptions used to determine net periodic benefit cost for the years      ended December 31 |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Discount      rate                                                                                                 |   |                  | 6.00   | %      |                                    |   | 5.75 | % |   |   | 6.00 | % |   |   | 5.75 | % |
| Salary      scale (ultimate)                                                                                       |   |                  | 3.78   |   |                                    |   | 3.78 |   |   |   | - |   |   |   | - |   |
| Expected      return on plan assets                                                                                |   |                  | 8.75   |   |                                    |   | 8.75 |   |   |   | 8.75 |   |   |   | 8.75 |   |

|                                      |   | 2007   |   |   | 2006   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |
| Long      duration bonds                  |   |   | 41     | %      |   |   | 37 | % |
| U.S.      stocks                          |   |   | 26     |   |   |   | 30 |   |
| International      stocks                 |   |   | 21     |   |   |   | 21 |   |
| Emerging      markets stocks and bonds    |   |   | 5      |   |   |   | 6 |   |
| Alternative      (private) investments    |   |   | 7      |   |   |   | 6 |   |
|       Total |   |   | 100    | %      |   |   | 100 | % |

----

|                                                                                        |   | Pre-65      Individuals |   |   | Post-65      Individuals |    |
|---------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|--------------------------|---------|
|                                                                                        |   | 2007                    |   |   | 2006                     |    |   | 2007 |   |   | 2006 |   |
|                                                                                        |   |                    |   |   |                     |    |   |   |   |   |   |   |
| Assumed health care      trend rates at December 31                                         |   |                    |   |   |                     |    |   |   |   |   |   |   |
| Health      care cost trend rate assumed for next year                                      |   |                    | 7.0    | %      |                     |    | 9.0 | % |   |   | 7.0 | % |   |   | 9.0 | % |
| Rate      to which the cost trend rate is assumed to decline (the ultimate trend      rate) |   |                    | 4.5    | %      |                     |    | 4.5 | % |   |   | 4.5 | % |   |   | 4.5 | % |
| Year      that the rate reaches the ultimate trend rate                                     |   | 2010                    |   |   |                     |  - |   |   | 2010 |   |   | 2010 |   |

|                                                                                     |   | One      Percent Increase |      |   | One      Percent Decrease |   |
|------------------------------------------------------------------------------------------|--------|---------------------------|-----------|--------|---------------------------|--------|
|                                                                                     |   |                      |      |   |                      |   |
| Impact      on 2007 service and interest cost                                            |   |                      | 25        |   |                      |   | (24 | ) |
| Impact      on postretirement benefit obligation  as      of December 31, 2007 |   |                      |  192 |   |                      |   | (188 | ) |
|                                                                                     |   |                      |      |   |                      |   |   |   |

|                   |   | Pension |   |   | Retiree      Medical and Other |   |
|------------------------|--------|---------|--------|--------|--------------------------------|--------|
|                   |   |    |   |   |                           |   |
| 2008                   |   | $       | 472    |   |                           | $      | 170 |   |
| 2009                   |   |    | 514    |   |                           |   | 176 |   |
| 2010                   |   |    | 550    |   |                           |   | 180 |   |
| 2011                   |   |    | 594    |   |                           |   | 185 |   |
| 2012                   |   |    | 635    |   |                           |   | 181 |   |
| 2013      – 2017 |   |    | 3,999  |   |                           |   | 969 |   |

----

|                              |   | 2007   |   |
|-----------------------------------|--------|--------|--------|
|                              |   | Cost   |   |   | Accumulated      Amortization |   |   | Net      Book Value |   |
| Amortized      intangible assets: |   |   |   |   |   |   |   |   |   |
| Airport      operating rights     |   | $      | 449    |   |   | $ | 235 |   |   | $ | 214 |   |
| Gate      lease rights            |   |   | 182    |   |   |   | 107 |   |   |   | 75 |   |
| Total                             |   | $      | 631    |   |   | $ | 342 |   |   | $ | 289 |   |

|                              |   | 2006   |   |
|-----------------------------------|--------|--------|--------|
|                              |   | Cost   |   |   | Accumulated      Amortization |   |   | Net      Book Value |   |
| Amortized      intangible assets: |   |   |   |   |   |   |   |   |   |
| Airport      operating rights     |   | $      | 449    |   |   | $ | 217 |   |   | $ | 232 |   |
| Gate      lease rights            |   |   | 182    |   |   |   | 100 |   |   |   | 82 |   |
| Total                             |   | $      | 631    |   |   | $ | 317 |   |   | $ | 314 |   |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                    |     Pension      Liability           |   |   Unrealized      Gain/(Loss) on Investments |   |  Unrealized      Gain/(Loss) on Derivative Financial Instruments |   |    IncomeTax      Benefit |   |      Total                       |
|---------------------------------------------------------------------------------------------------------|----------------------------------------------------------|--------|--------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|------------------------------------------|--------|-----------------------------------------------------------|
|                                                                                                    |                                                     |   |                                                   |   |                                                                  |   |                                     |   |                                                      |   |
| Balance      at January 1, 2005                                                                         | $(827)                                                   |   | $     (2)                     |   | $     21                                     |   | $     36        |   | $(772)                                                    |   |
| Current      year net change                                                                            | (379)                                                    |   | 6                                                      |   | -                                                                     |   | -                                        |   | (373)                                                     |   |
| Reclassification      of derivative financial instruments into earnings                                 |   -                                            |   |   -                                          |   |   (50)                                                      |   |   -                            |   |   (50)                                          |   |
| Change      in fair value of derivative financial instruments                                           |   -                                            |   |   -                                          |   |   108                                                       |   |   -                            |   |   108                                           |   |
| Balance      at December 31, 2005                                                                       | (1,206)                                                  |   | 4                                                      |   | 79                                                                    |   | 36                                       |   | (1,087)                                                   |   |
| Current      year net change                                                                            | 748                                                      |   | -                                                      |   | -                                                                     |   | -                                        |   | 748                                                       |   |
| Reclassification      of derivative financial instruments into earnings                                 |   -                                            |   |   -                                          |   |   (88)                                                      |   |   -                            |   |   (88)                                          |   |
| Change      in fair value of derivative financial instruments                                           |   -                                            |   |   -                                          |   |   26                                                        |   |   -                            |   |   26                                            |   |
| Adjustment      resulting from        adoption of      SFAS 158 |     (998)                            |   |                                                   |   |                                                                  |   |                                     |   |        (998)           |   |
| Balance      at December 31, 2006                                                                       | (1,456)                                                  |   | 4                                                      |   | 17                                                                    |   | 36                                       |   | (1,399)                                                   |   |
| Current      year change                                                                                | 1,723                                                    |   | (6)                                                    |   | -                                                                     |   | -                                        |   | 1,717                                                     |   |
| Amortization      of actuarial loss and prior service cost                                              |          21 |   |                                                   |   |                                                                  |   |                                     |   |          21  |   |
| Reclassification      of derivative financial instruments into earnings                                 |   -                                            |   |   -                                          |   |   (158)                                                     |   |   -                            |   |   (158)                                         |   |
| Change      in fair value ofderivative      financialinstruments                                        |   -                                            |   |   -                                          |   |   379                                                       |   |   -                            |   |          379 |   |
| Balance      at December 31, 2007                                                                       | $    288                             |   | $        (2)   |   | $     238                                    |   | $     365       |   | $560                                                      |   |

----

----

|                             |   | Year      Ended December 31, |   |
|----------------------------------|--------|------------------------------|--------|
|                             |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                             |   |                         |   |   |   |   |   |   |   |
| DOT      Domestic                |   | $                            | 14,077 |   |   | $ | 14,086 |   |   | $ | 13,190 |   |
| DOT      Latin America           |   |                         | 4,268  |   |   |   | 4,024 |   |   |   | 3,568 |   |
| DOT      Atlantic                |   |                         | 3,556  |   |   |   | 3,409 |   |   |   | 3,115 |   |
| DOT      Pacific                 |   |                         | 932    |   |   |   | 971 |   |   |   | 784 |   |
|                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      consolidated revenues |   | $                            | 22,833 |   |   | $ | 22,490 |   |   | $ | 20,657 |   |

|                         |   | FirstQuarter |   |   | Second      Quarter |   |   | Third      Quarter |   |   | Fourth      Quarter |   |
|------------------------------|--------|--------------|--------|--------|---------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
| 2007                         |   |         |   |   |                |   |   |               |   |   |                |   |
| Operating      revenues      |   | $            | 5,401  |   |                | $      | 5,853  |               |   | $      | 5,921               |   |   | $ | 5,656 |   |
| Operating      income (loss) |   |         | 183    |   |                |   | 394    |               |   |   | 265                 |   |   |   | (140 | ) |
| Net      earnings (loss)     |   |         | 51     |   |                |   | 271    |               |   |   | 148                 |   |   |   | (109 | ) |
|                         |   |         |   |   |                |   |   |               |   |   |                |   |   |   |   |   |
| 2006                         |   |         |   |   |                |   |   |               |   |   |                |   |   |   |   |   |
| Operating      revenues      |   | $            | 5,327  |   |                | $      | 5,959  |               |   | $      | 5,830               |   |   | $ | 5,374 |   |
| Operating      income (loss) |   |         | 52     |   |                |   | 420    |               |   |   | 220                 |   |   |   | 123 |   |
| Net      earnings (loss)     |   |         | (106   | )      |                |   | 280    |               |   |   | 1                   |   |   |   | (11 | ) |
|                         |   |         |   |   |                |   |   |               |   |   |                |   |   |   |   |   |

----

----

----

| PART      III |
|---------------|

|                    |   | 2007   |   |   | 2006   |   |
|-------------------------|--------|--------|--------|--------|--------|--------|
|                    |   |   |   |   |   |   |
| Audit      Fees         |   | $      | 2,442  |   |   | $      | 2,523 |   |
| Audit      Related Fees |   |   | 395    |   |   |   | 379 |   |
| Tax      Fees           |   |   | 74     |   |   |   | 35 |   |
| Total                   |   | $      | 2,911  |   |   | $      | 2,937 |   |

----

| PART      IV |
|--------------|

|   | (a) | (1) | The      following financial statements and Independent Auditors’ Report are filed      as part of this report: |
|--------|-----|-----|-----------------------------------------------------------------------------------------------------------------------|

|                                                                                                                          |   | Page           |
|-------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                                                                                                                          |   |           |
| Report      of Independent Registered Public Accounting Firm                                                                  |   |  37       |
|                                                                                                                          |   |           |
| Consolidated      Statements of Operations for the Years EndedDecember      31, 2007, 2006 and 2005                           |   |   38 |
|                                                                                                                          |   |           |
| Consolidated      Balance Sheets at December 31, 2007 and 2006                                                                |   |  39-40    |
|                                                                                                                          |   |           |
| Consolidated      Statements of Cash Flows for the Years EndedDecember      31, 2007, 2006 and 2005                           |   |   41 |
|                                                                                                                          |   |           |
| Consolidated      Statements of Stockholder’s Equity (Deficit) for theYears      Ended December 31, 2007, 2006 and 2005 |   |   42 |
|                                                                                                                          |   |           |
| Notes      to Consolidated Financial Statements                                                                               |   |  43-69    |

|   | (2) | The      following financial statement schedule is filed as part of this      report: |
|--------|-----|---------------------------------------------------------------------------------------|

|   |   | Page |
|--------|--------|------|

|                                                           |   |     |
|----------------------------------------------------------------|--------|----------|
| Schedule      IIValuation and Qualifying Accounts and Reserves |   |  78 |

|   | Schedules      not included have been omitted because they are not applicable or because      the required information is included in the consolidated financial      statements or notes thereto. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Exhibits      required to be filed by Item 601 of Regulation S-K. (Where the amount of      securities authorized to be issued under any of American's long-term debt      agreements does not exceed 10 percent of American's assets, pursuant to      paragraph (b)(4) of Item 601 of Regulation S-K, in lieu of filing such as      an exhibit, American hereby agrees to furnish to the Commission upon      request a copy of any agreement with respect to such long-term      debt.) |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Exhibit |
|--------|---------|

| 10.1   | Information      Technology Services Agreement, dated July 1, 1996, between American and      The Sabre Group, Inc., incorporated by reference to Exhibit 10.6 to The      Sabre Group Holdings, Inc.’s Registration Statement on Form S-1, file      number 333-09747.  Confidential treatment was granted as to a      portion of this document. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2   | Bylaws      of American Airlines, Inc., amended January 22, 2003, incorporated by      reference to American’s report on Form 10-K for the year ended December      31, 2002. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Gerard J. Arpey dated May 21, 1998, incorporated by      reference to Exhibit 10.61 to AMR’s report on Form 10-K for the year ended      December 31, 1998. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Peter M. Bowler, dated May 21, 1998, incorporated by      reference to Exhibit 10.63 to AMR’s report on Form 10-K for the year ended      December 31, 1998. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Daniel P. Garton, dated May 21, 1998, incorporated      by reference to Exhibit 10.66 to AMR’s report on Form 10-K for the year      ended December 31, 1998. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Monte E. Ford, dated November 15, 2000, incorporated      by reference to Exhibit 10.74 to AMR’s report on Form 10-K for the year      ended December 31, 2000. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Henry C. Joyner, dated January 19, 2000,      incorporated by reference to Exhibit 10.74 to AMR’s report on Form 10-K      for the year ended December 31,1999. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Charles D. MarLett, dated May 21, 1998, incorporated      by reference to Exhibit 10.70 to AMR’s report on Form 10-K for the year      ended December 31, 1998. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and William K. Ris, Jr., dated October 20, 1999,      incorporated by reference to Exhibit 10.79 to AMR’s report on Form 10-K      for the year ended December 31,1999. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.10   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Gary F. Kennedy dated February 3, 2003, incorporated      by reference to Exhibit 10.55 to AMR’s report on Form 10-K for the year      ended December 31, 2002. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Robert W. Reding dated May 20, 2003, incorporated by      reference to Exhibit 10.71 to AMR’s report on Form 10-K for the year ended      December 31, 2003. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12   | Employment      agreement between AMR, American Airlines and William K. Ris, Jr. dated      November 11, 1999, incorporated by reference to Exhibit 10.73 to AMR’s      report on Form 10-K for the year ended December 31,  2003. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13   | Employment      agreement between AMR, American Airlines and Robert W. Reding dated May      21, 2003, incorporated by reference to Exhibit 10.94 to AMR’s report on      Form 10-K for the year ended December 31,2004. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Jeffrey J. Brundage dated April 1, 2004,      incorporated by reference to Exhibit 10.5 to AMR’s report on Form 10-Q for      the quarterly period ended March 31,2004. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15   | Supplemental      Executive Retirement Program for Officers of American Airlines, Inc., as      amended on October 15, 2002, incorporated by reference to Exhibit 10.60 to      AMR’s report on Form 10-K for the year ended December 31,      2002. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16   | Aircraft      Purchase Agreement by and between American Airlines, Inc. and The Boeing      Company, dated October 31, 1997, incorporated by reference to Exhibit      10.48 to AMR Corporation’s report on Form 10-K for the year ended December      31, 1997.  Confidential treatment was granted as to a portion of      this document. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17   | Letter      Agreement dated November 17, 2004 and Purchase Agreement Supplements dated      January 11, 2005 between the Boeing Company and American Airlines, Inc.,      incorporated by reference to Exhibit 10.99 to AMR’s report on Form 10-K      for the year ended December 31, 2004. Confidential treatment was granted      as to a portion of theseagreements. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18   | Letter      Agreement between the Boeing Company and American Airlines, Inc. dated May      5, 2005, incorporated by reference to Exhibit 10.7 to AMR’s report on Form      10-Q for the quarterly period ended June 30, 2005.  Confidential      treatment was granted as to a portion of this  agreement. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.19   | Credit      Agreement dated as of December 17, 2004, among American Airlines, Inc.,      AMR Corporation, the Lenders from time to time party thereto, Citicorp      USA, Inc., as Administrative Agent for the Lenders, JPMorgan Chase Bank,      N.A., as Syndication Agent and Citigroup Global Markets Inc. and J.P.      Morgan Securities Inc., as Joint Lead Arrangers and Joint Book-Running      Managers, incorporated by reference to Exhibit 10.103 to AMR’s report on      Form 10-K for the year ended December 31,2004. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20   | 2007      Annual Incentive Plan for American, as amended January 9,    2008 |
|-------------------|-----------------------------------------------------------------------------|

| 10.21   | American      Airlines 2008 Employee Profit SharingPlan. |
|-------------------|----------------------------------------------------------|

| 10.22   | 2008      Annual Incentive Plan for American, incorporated by reference to Exhibit      99.1 to AMR’s current report on Form 8-K dated January 22,      2008. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23   | Stock      Purchase Agreement dated as of July 3, 2007, between American Airlines,      Inc., Radio Acquisition Corp., ARINC Incorporated, and the other parties      identified therein, incorporated by reference to Exhibit 10.1 to AMR’s      report on Form 10-Q for the quarter ended September 30, 3007.       Portions of this Exhibit have been omitted and filed separately with      the Securities and Exchange Commission pursuant to a confidential      treatment request under Rule 24b-2 of the Securities and Exchange Act of      1934, as amended. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated August 17, 2007. Portions of this Exhibit have been omitted      and filed separately with the Securities and Exchange Commission pursuant      to a confidential treatment request under Rule 24b-2 of the Securities and      Exchange Act of 1934, as amended. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.25   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated November 20, 2007.  Portions of this Exhibit have      been omitted and filed separately with the Securities and Exchange      Commission pursuant to a confidential treatment request under Rule 24b-2      of the Securities and Exchange Act of 1934, as amended. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated December 10, 2007.  Portions of this Exhibit have      been omitted and filed separately with the Securities and Exchange      Commission pursuant to a confidential treatment request under Rule 24b-2      of the Securities and Exchange Act of 1934, as amended. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated January 20, 2008.  Portions of this Exhibit have      been omitted and filed separately with the Securities and Exchange      Commission pursuant to a confidential treatment request under Rule 24b-2      of the Securities and Exchange Act of 1934, as amended. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.28   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated February 11, 2008.  Portions of this Exhibit have      been omitted and filed separately with the Securities and Exchange      Commission pursuant to a confidential treatment request under Rule 24b-2      of the Securities and Exchange Act of 1934, as amended. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                      12 | Computation      of ratio of earnings to fixed charges for the years ended December 31,      2007, 2006, 2005, 2004, and 2003. |
|--------|----------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|

| 23   | Consent      of Independent Registered Public Accounting  Firm. |
|----------------|-----------------------------------------------------------------|

----

| 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). |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| By:    | /s/      Gerard J. Arpey                             |
|--------|------------------------------------------------------|
|   | Gerard      J. Arpey                                 |
|   | Chairman,      President and Chief Executive Officer |
|   | (Principal      Executive Officer)                   |
|   |                                                 |   |

| /s/      Gerard J. Arpey                                                               |   | /s/      Thomas W. Horton                                                                                  |   |
|----------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|
| Gerard      J. Arpey                                                                   |   | Thomas      W. Horton                                                                                      |   |   |
| Director,      Chairman and Chief Executive Officer (Principal Executive      Officer) |   | Executive      Vice President and Chief Financial Officer(Principal      Financial and Accounting Officer) |   |

| /s/      John W. Bachmann, Director           |   | /s/      Ann McLaughlin Korologos, Director |
|-----------------------------------------------|--------|---------------------------------------------|
| John      W. Bachmann, Director               |   | Ann      McLaughlin Korologos, Director     |
|                                          |   |                                        |
|                                          |   |                                        |
| /s/      David L. Boren, Director             |   | /s/      Michael A. Miles, Director         |
| David      L. Boren, Director                 |   | Michael      A. Miles, Director             |
|                                          |   |                                        |
|                                          |   |                                        |
| /s/      Armando M. Codina, Director          |   | /s/      Philip J. Purcell, Director        |
| Armando      M. Codina, Director              |   | Philip      J. Purcell, Director            |
|                                          |   |                                        |
|                                          |   |                                        |
| /s/      Earl G. Graves, Director             |   | /s/      Ray M. Robinson, Director          |
| Earl      G. Graves, Director                 |   | Ray      M. Robinson, Director              |
|                                          |   |                                        |
|                                          |   |                                        |
| /s/      Rajat K. Gupta, Director             |   | /s/      Judith Rodin, Director             |
| Rajat      K. Gupta, Director                 |   | Judith      Rodin, Director                 |
|                                          |   |                                        |
|                                          |   |                                        |
| /s/      Alberto Ibargüen,      Director |   | /s/      Matthew K. Rose, Director          |
| Alberto      Ibargüen,      Director     |   | Matthew      K. Rose, Director              |
|                                          |   |                                        |
|                                          |   |                                        |
|                                          |   | /s/      Roger T. Staubach, Director        |
|                                          |   | Roger      T. Staubach, Director            |
| Date: February      20, 2008             |   |                                        |
|                                          |   |                                        |

|                                                  |   Balanceatbeginning of year | Changes      charged to statement of operations accounts |      Payments |    Write-offs      (net of recoveries) |  Sales,retire-mentsand transfers |   Balanceatend      ofyear |
|-------------------------------------------------------|---------------------------------------------|----------------------------------------------------------|----------------------------------------|-------------------------------------------------------|--------------------------------------------|--------------------------------------|
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Year      ended December 31, 2007                     |                                        |                                                     |                                   |                                                  |                                       |                                 |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      forobsolescence      of inventories    |  $  364                      |  $  24                                    |  $     - |  $   -                            |  $  (15)                    |  $  373               |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      foruncollectible      accounts         |  44                                    |  (1)                                                |                                   |  (3)                                             |                                       |  40                             |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Reserves      for environmentalremediation      costs |  33                                    |  -                                                  |  (7)                              |  (5)                                             |  -                                    |  21                             |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Year      ended December 31, 2006                     |                                        |                                                     |                                   |                                                  |                                       |                                 |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      forobsolescence      of inventories    |  $  363                      |  $  21                                    |  $     - |  $   -                            |  $  (20)                    |  $  364               |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      foruncollectible      accounts         |  59                                    |  3                                                  |  -                                |  (25)                                            |  7                                    |  44                             |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Reserves      for environmentalremediation      costs |  40                                    |  2                                                  |  (9)                              |     -                             |  -                                    |  33                             |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Year      ended December 31, 2005                     |                                        |                                                     |                                   |                                                  |                                       |                                 |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      forobsolescence      of inventories    |  $  329                      |  $  28                                    |  $     - |  $     -                |  $  6                       |  $  363               |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      foruncollectible      accounts         |  58                                    |  6                                                  |  -                                |  (5)                                             |  -                                    |  59                             |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Reserves      for environmentalremediation      costs |  62                                    |  (18)                                               |  (4)                              |     -                             |  -                                    |  40                             |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |
| Allowance      for insurancereceivable                |  22                                    |  (22)                                               |  -                                |  -                                               |  -                                    |  -                              |
|                                                  |                                        |                                                     |                                   |                                                  |                                       |                                 |

----

|                                                                                   |   | 2007   |      |   | 2006   |   |      | 2005   |   |   | 2004   |   |   | 2003   |   |
|----------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |
| Earnings:                                                                              |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |
| Income      (loss) before income taxes and cumulative effect of accounting      change |   | $      |  356 |   |   | $      |  164 |   |   | $      | (892   | )      |   | $      | (821   | ) |   | $ | (1,409 | ) |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:  Total      fixed charges (per below)                                   |   |   | 1,668     |   |   |   | 1,705     |   |   |   | 1,566  |   |   |   | 1,479  |   |   |   | 1,421 |   |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  Interest      capitalized                                             |   |   | 20        |   |   |   | 29        |   |   |   | 64     |   |   |   | 77     |   |   |   | 66 |   |
| Total      earnings (loss)                                                             |   | $      | 2,004     |   |   | $      | 1,840     |   |   | $      | 610    |   |   | $      | 581    |   |   | $ | (54 | ) |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      charges:                                                                    |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                               |   | $      | 793       |   |   | $      | 842       |   |   | $      | 724    |   |   | $      | 652    |   |   | $ | 525 |   |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Portion      of rental expense representative of the interest factor                   |   |   | 862       |   |   |   | 848       |   |   |   | 831    |   |   |   | 815    |   |   |   | 888 |   |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of debt expense                                                      |   |   | 13        |   |   |   | 15        |   |   |   | 11     |   |   |   | 12     |   |   |   | 8 |   |
| Total      fixed charges                                                               |   | $      | 1,668     |   |   | $      | 1,705     |   |   | $      | 1,566  |   |   | $      | 1,479  |   |   | $ | 1,421 |   |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio      of earnings to fixed charges                                                |   |   | 1.20      |   |   |   | 1.08      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
|                                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Coverage      deficiency                                                               |   |   | -         |   |   |   | -         |   |   | $      | 956    |   |   | $      | 898    |   |   | $ | 1,475 |   |

|   | Note:As      of December 31, 2007, American has guaranteed approximately $1.1 billion      of unsecured debt and approximately $347 million of secured      debt.  The impact of these unconditional guarantees is not      included in the abovecomputation. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 1.   | I      have reviewed this annual report on Form 10-K of American Airlines,      Inc.; |
|----------------|---------------------------------------------------------------------------------------|

| 2.   | Based      on my knowledge, this report does not contain any untrue statement of a      material fact or omit to state a material fact necessary to make the      statements made, in light of the circumstances under which such statements      were made, not misleading with respect to the period covered by this      report; |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Based      on my knowledge, the financial statements, and other financial information      included in this report, fairly present in all material respects the      financial condition, results of operations and cash flows of the      registrant as of, and for, the periods presented in this      report; |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The      registrant's other certifying officer(s) and I are responsible for      establishing and maintaining disclosure controls and procedures (as      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal      control over financial reporting (as defined in Exchange Act Rules      13a-15(f) and 15d-15(f)) for the registrant and  have: |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Designed      such disclosure controls and procedures, or caused such disclosure      controls and procedures to be designed under our supervision, to ensure      that material information relating to the registrant, including its      consolidated subsidiaries, is made known to us by others within those      entities, particularly during the period in which this report is being      prepared; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Designed      such internal control over financial reporting, or caused such internal      control over financial reporting to be designed under our supervision, to      provide reasonable assurance regarding the reliability of financial      reporting and the preparation of financial statements for external      purposes in accordance with generally accepted accounting      principles; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Evaluated      the effectiveness of the registrant's disclosure controls and procedures      and presented in this report our conclusions about the effectiveness of      the disclosure controls and procedures, as of the end of the period      covered by this report based on such evaluation;  and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Disclosed      in this report any change in the registrant's internal control over      financial reporting that occurred during the registrant's most recent      fiscal quarter (the registrant's fourth fiscal quarter in the case of an      annual report) that has materially affected, or is reasonably likely to      materially affect, the registrant's internal control over financial      reporting; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | The      registrant's other certifying officer(s) and I have disclosed, based on      our most recent evaluation of internal control over financial reporting,      to the registrant's auditors and the audit committee of the registrant's      board of directors (or persons performing the equivalent      functions): |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | All      significant deficiencies and material weaknesses in the design or      operation of internal control over financial reporting which are      reasonably likely to adversely affect the registrant's ability to record,      process, summarize and report financial information;  and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Any      fraud, whether or not material, that involves management or other      employees who have a significant role in the registrant's internal control      over financial reporting. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.   | I      have reviewed this annual report on Form 10-K of American Airlines,      Inc.; |
|----------------|---------------------------------------------------------------------------------------|

| 2.   | Based      on my knowledge, this report does not contain any untrue statement of a      material fact or omit to state a material fact necessary to make the      statements made, in light of the circumstances under which such statements      were made, not misleading with respect to the period covered by this      report; |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Based      on my knowledge, the financial statements, and other financial information      included in this report, fairly present in all material respects the      financial condition, results of operations and cash flows of the      registrant as of, and for, the periods presented in this      report; |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The      registrant's other certifying officer(s) and I are responsible for      establishing and maintaining disclosure controls and procedures (as      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal      control over financial reporting (as defined in Exchange Act Rules      13a-15(f) and 15d-15(f)) for the registrant and  have: |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Designed      such disclosure controls and procedures, or caused such disclosure      controls and procedures to be designed under our supervision, to ensure      that material information relating to the registrant, including its      consolidated subsidiaries, is made known to us by others within those      entities, particularly during the period in which this report is being      prepared; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Designed      such internal control over financial reporting, or caused such internal      control over financial reporting to be designed under our supervision, to      provide reasonable assurance regarding the reliability of financial      reporting and the preparation of financial statements for external      purposes in accordance with generally accepted accounting      principles; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Evaluated      the effectiveness of the registrant's disclosure controls and procedures      and presented in this report our conclusions about the effectiveness of      the disclosure controls and procedures, as of the end of the period      covered by this report based on such evaluation;  and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Disclosed      in this report any change in the registrant's internal control over      financial reporting that occurred during the registrant's most recent      fiscal quarter (the registrant's fourth fiscal quarter in the case of an      annual report) that has materially affected, or is reasonably likely to      materially affect, the registrant's internal control over financial      reporting; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | The      registrant's other certifying officer(s) and I have disclosed, based on      our most recent evaluation of internal control over financial reporting,      to the registrant's auditors and the audit committee of the registrant's      board of directors (or persons performing the equivalent      functions): |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | All      significant deficiencies and material weaknesses in the design or      operation of internal control over financial reporting which are      reasonably likely to adversely affect the registrant's ability to record,      process, summarize and report financial information;  and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Any      fraud, whether or not material, that involves management or other      employees who have a significant role in the registrant's internal control      over financial reporting. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----