ar05198k.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

_____________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934


Date of earliest event
  reported: May 19, 2010
 
                         AMR CORPORATION                   _
(Exact name of registrant as specified in its charter)


          Delaware                                     1-8400                                      75-1825172           _
(State of Incorporation) ( Commission File Number)     (IRS Employer Identification No.)


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


                     (817) 963-1234                 _ 
                    (Registrant's telephone number)   


                         
            (Former name or former address, if changed since last report.)   

 
                           

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

Item 8.01  Other Events

This report provides an estimate of revenue improvement and cost savings associated with certain AMR Corporation (the Company) initiatives, as well as an estimate of the Company’s current labor cost disadvantage versus its network competitors.

Under the Company’s current plans, the Company estimates that the implementation of its Cornerstone strategy, which focuses its network on five key markets (New York, Los Angeles, Chicago, Dallas-Fort Worth, and Miami), the implementation of the Company’s proposed Joint Business Agreements with British Airways/Iberia and Japan Airlines, and various other alliance and network activities will result in incremental revenues and cost savings of over $500 million per year.  The Company expects that it will be realizing the majority of these incremental revenues and cost savings in 2011, and the remainder by year end 2012.  This estimate is based on a number of assumptions that are inherently uncertain, and the Company’s ability to realize these benefits depends on various factors, some of which are beyond the Company’s control, such as obtaining regulatory approvals of its proposed Joint Business Agreements and other factors referred to below.

Based on analysis of airline industry labor contracts, the Company also estimates that at the beginning of 2010, American Airlines's labor cost disadvantage (the amount by which its labor costs exceed what such costs would be if they were determined based on other network carrier labor contracts) was approximately $600 million per year.  The Company expects this gap to narrow as open industry labor contracts are settled.  This expectation is based on a number of assumptions, the validity of which cannot be assured.  The airline industry labor contract negotiation process is inherently uncertain and the results of labor contract negotiations are difficult to predict.

 
Statements in this report contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events.  This report includes an estimate of revenue improvement and cost savings associated with certain Company initiatives, a statement regarding when those benefits will be realized, and a statement regarding the Company’s expectations regarding its labor cost disadvantage, each of which is a forward-looking statement.  Forward-looking statements in this report are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.  Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations.  The following factors, in addition to other possible factors not listed, could cause the Company’s actual results to differ materially from those expressed in forward-looking statements:  the materially weakened financial condition of the Company, resulting from its significant losses in recent years; weaker demand for air travel and lower investment asset returns resulting from the severe global economic downturn; the Company’s need to raise substantial additional funds and its ability to do so on acceptable terms; the ability of the Company to generate additional revenues and reduce its costs; continued high and volatile fuel prices and further increases in the price of fuel, and the availability of fuel; the Company’s substantial indebtedness and other obligations; the ability of the Company to satisfy covenants and conditions in certain of its financing and other agreements; changes in economic and other conditions beyond the Company’s control, and the volatile results of the Company’s operations; the fiercely and increasingly competitive business environment faced by the Company; potential industry consolidation and alliance changes; competition with reorganized carriers; low fare levels by historical standards and the Company’s reduced pricing power; changes in the Company’s corporate or business strategy; government regulation of the Company’s business; conflicts overseas or terrorist attacks; uncertainties with respect to the Company’s international operations; outbreaks of a disease (such as the H1N1 virus, SARS or avian flu) that affects travel behavior; labor costs that are higher than those of the Company’s competitors; uncertainties with respect to the Company’s relationships with unionized and other employee work groups; increased insurance costs and potential reductions of available insurance coverage; the Company’s ability to retain key management personnel; potential failures or disruptions of the Company’s computer, communications or other technology systems; losses and adverse publicity resulting from any accident involving the Company’s aircraft; changes in the price of the Company’s common stock; and the ability of the Company to reach acceptable agreements with third parties.  Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
 
 
 
 
 
 
SIGNATURE



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


                          


     AMR CORPORATION



/s/ Kenneth W. Wimberly
Kenneth W. Wimberly
Corporate Secretary





Dated:  May 19, 2010