FORM 8-K

                       CURRENT REPORT

           Pursuant to Section 13 or 15(d) of the

               Securities Exchange Act of 1934


Date of earliest event
  reported:  February 7, 2006


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


          Delaware               1-2691             13-1502798
(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 1.01  Entry into a Material Definitive Agreement

AMR  Corporation's Compensation Committee has  approved  the
2006  Annual  Incentive  Plan for  American  Airlines,  Inc.
("American")(the  "AIP").   All employees  of  American  are
eligible  to  participate in the AIP  (including  American's
executive  officers,  some  of  whom  are  officers  of  AMR
Corporation).  The AIP is American's annual bonus  plan  and
provides  for  the  payment of awards in the  event  certain
financial  and/or  customer service metrics  are  satisfied.
The  approval is effective as of February 7, 2006 and a copy
of the AIP is attached as Exhibit 99.1.

Item 9.01  Financial Statements and Exhibits

          (c)  Exhibits

                  Exhibit   99.1     2006 Annual Incentive
                                     Plan for American

















                          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.


                                    American  Airlines, Inc.



                                    /s/ Charles D. MarLett
                                    Charles D. MarLett
                                    Corporate Secretary



Dated:  February 10, 2006















                        EXHIBIT INDEX


Exhibit        Description

  99.1         2006 Annual Incentive Plan for American













                                                Exhibit 99.1


                 2006 ANNUAL INCENTIVE PLAN



Background

As  part  of  the restructuring process that took  place  in
April  2003,  three  new  broad-based variable  compensation
plans  were  created: the Broad Based Employee Stock  Option
Plan,  a  new  Profit Sharing Plan and the Annual  Incentive
Plan (the "Plan" or "AIP").

The   framework  for  the  Plan  was  developed  during  the
restructuring, but the specific plan metrics  were  left  to
the discretion of the Board of Directors (sometimes referred
to as the "Board").

The  Board  has determined that for 2006 there will  be  two
components  to  the Plan - customer service  and  financial.
While   related,   the  two  components  will   be   treated
separately.  The financial component will provide  an  award
if  the  company meets annual financial goals.  The customer
service component will provide an award if the company meets
customer satisfaction and dependability goals, regardless of
its financial performance.  Providing the opportunity for  a
customer  service  payout without meeting financial  hurdles
recognizes that the company's performance in the  two  areas
most important to our customers - dependability and customer
satisfaction - will contribute to improved profitability.

These  broad-based compensation plans have been designed  to
allow all employees throughout the American Airlines team to
share  in  the  company's success.  The  Plan  provides  the
opportunity to share immediately in that success  by  taking
concrete  steps in each employee's everyday work  that  will
move the company towards profitability.

With  input  from our employees, the unions and  the  Board,
these   broad-based  variable  compensation  programs   will
continue  to  evolve.  Today, they form the building  blocks
necessary  to ensure that everyone is able to share  in  the
company's success.







Definitions

Capitalized  terms not otherwise defined in  the  Plan  will
have  the  meanings  set forth in the  2003  Employee  Stock
Incentive Plan (the "2003 Stock Plan").

"AMR" is defined as AMR Corporation.

"Affiliate" is defined as a subsidiary of AMR or any  entity
that  is  designated  by the Committee  as  a  participating
employer  under  the  Plan, provided that  AMR  directly  or
indirectly owns at least 20% of the combined voting power of
all classes of stock of such entity.

"American"  is  defined as AMR less AMR  subsidiaries  other
than American Airlines, Inc. and its subsidiaries.

"American Airlines" is defined as American Airlines, Inc.

"American's Pre-Tax Earnings Margin" is a percentage and  is
defined  as  American's earnings, relative to its  revenues,
before any applicable income tax expense and is exclusive of
any profit sharing payments, payments under the Plan and any
special,   extraordinary  or  one-time  items  as   may   be
determined  by  the  Committee  in  its  discretion,   after
consultation with AMR's independent auditors.

"Committee" is defined as the Compensation Committee of  the
AMR Board of Directors.

"Competitor" is defined as one of AirTran Airways,  American
Trans  Air  (ATA),  America West Airlines, Alaska  Airlines,
Continental  Airlines,  Delta Air  Lines,  JetBlue  Airways,
Northwest Airlines, Southwest Airlines, United Air Lines and
US Airways.

"Disabled", "Disability" or variants thereof will  have  the
meaning  as defined in section 409(a)(2)(C) of the  Internal
Revenue Code of 1986, as amended (the "Code").

"DOT  Rank"  is  defined as American's  relative  rank  with
respect  to  the Competitors in the category of "arrivals+14
(A+14)"   as   determined   by  the   U.S.   Department   of
Transportation  (DOT).  This monthly  ranking  is  based  on
DOT's  aggregated A+14 data for the period January  1,  2006
through December 31, 2006, inclusive.  To the extent that at
any point during the year a Competitor ceases to report A+14
data, it will be excluded from the calculation for the month
in  which  it  ceases to report A+14 data,  and  for  future
months,  until  it begins to report A+14  data  for  a  full
month.

"Eligible  Earnings" is defined by the nature  of  the  work
group.   For  employees who are represented by a union,  the
definition  of  Eligible  Earnings will  be  the  definition
contained  in the Letter of Agreement between the union  and
the  company.   For employees who are not represented  by  a
union  the definition of Eligible Earnings will be identical
to  the  term  "Qualified Earnings" under the 2003  American
Airlines Employee Profit Sharing Plan.

"Fund"  is  defined  as  the fund, if  any,  accumulated  in
accordance with this Plan.

"Letters of Agreement" is defined as the agreements  reached
with   the   Allied  Pilots  Association,   Association   of
Professional  Flight  Attendants and the  Transport  Workers
Union  during  the  April  2003 restructuring  process  that
define the framework of the Plan.

"Measure" is defined, as appropriate, as American's  Pre-Tax
Earnings Margin, DOT Rank or Survey America Rank.

"Named  Executive Officers" is defined as  the  officers  of
American  who  are  named in the AMR  proxy  statement  that
reports  income for the year in which awards under the  Plan
are earned.







"Other  Cash  Compensation  Programs"  is  defined  as  cash
payments  to  management employees that are  not  predicated
upon the criteria and thresholds contained in the Plan.  Per
discussions  and as specified in the Letters  of  Agreement,
this term does not include salary, stock-based compensation,
severance, retirement benefits or deferred payments of  base
compensation, or eligible cash bonuses from prior years.

"Profit  Sharing  Plan" is defined as  the  2006  Employee
Profit Sharing Plan.

"Survey America Rank" is defined as American's relative rank
with  respect to its Competitors in the category of "Overall
Travel  Experience", using a blended ranking of first  class
and  coach cabin, as reported in Plog Inc.'s Survey America.
The  Survey  America ranking is based on  monthly  data  for
American and the Competitors for the period January 1,  2006
through December 31, 2006, inclusive.  To the extent that at
any   point   during  such  year  a  Competitor  ceases   to
participate,  it  will be excluded from the calculation  for
the  month in which it ceased to participate, and for future
months,  until  it begins to participate again  for  a  full
month period.

"Target  Award"  is  defined  as  the  award  (stated  as  a
percentage of Eligible Earnings) for an eligible participant
when target level is achieved on the financial measure.  The
Target Award is determined by the employee's job level.

Plan Measures

As   outlined  earlier,  the  Plan  is  comprised   of   two
components: customer service and financial.

Customer Service Component

The  customer service component of the Plan will include two
performance    metrics   -   customer    satisfaction    and
dependability.  The Plan will reward employees  if  American
achieves at least one of the two metrics.

The customer satisfaction metric will be based on American's
Survey America Rank.  The dependability metric will be based
on American's DOT Rank.

Monthly  awards will be based on the higher of  the  monthly
rankings for DOT Rank or for Survey America Rank, as per the
payout schedule below.  These award levels are the same  for
all employees regardless of full-time or part-time status or
job level.

                                       Payout
                                     Per Person
               Monthly Rank           Per Month
                  First                  $100
              Second - Third             $ 50
              Fourth - Sixth             $ 25

If both metrics are achieved in any single month, the awards
will  not be additive.  Awards will be based solely  on  the
higher ranking of the two metrics.

Awards  under  the customer service component will  be  paid
regardless  of  performance under the  financial  component.
The  awards  under  the customer service component  will  be
paid, net of applicable taxes, within 75 days after DOT Rank
and   Survey   America  Rank  are  available  and   employee
eligibility is established.








For example:


                    Monthly Ranking

             Survey           Higher Rank
            America    DOT      Achieved         Payout
January         2       7           2      2nd place = $ 50
February        4       5           4      4th place = $ 25
March           3       1           1      1st place = $100
                                    Quarterly Payout   $175

Financial Component

The  financial  component of the Plan  will  be  based  upon
American's  Pre-Tax Earnings Margin for the full-year  2006.
The  measure has a threshold (performance below  this  level
earns no award), a target and a maximum as reflected below:
                                American's Pre-Tax
                                  Earnings Margin
               Threshold                 5%
               Target                   10%
               Maximum                  15%

For non-management, support staff and management levels 1-4,
awards  under  the financial component, in combination  with
the  customer service awards, will provide total annual Plan
payouts ranging from 2.5% of Eligible Earnings at threshold,
5%  of  Eligible  Earnings at target  and  10%  of  Eligible
Earnings at Maximum.  Award levels have a linear progression
as  American's Pre-Tax Earnings Margin increases between the
threshold  and  target levels, and between  the  target  and
maximum levels.


              American's Pre-Tax         Award as a % of
               Earnings Margin          Eligible Earnings
Threshold             5%                       2.5%
Target               10%                       5.0%
Maximum              15%                      10.0%

For  management Levels 5 and above, none of whom participate
in the Profit Sharing Plan; the Plan is the successor to the
traditional  Incentive Compensation Plan.  As in  the  past,
the  awards  for  employees at Level 5  and  above  will  be
determined  by the senior management of AMR or,  in  certain
instances,  by the Board; will vary by level;  and  will  be
based on an assessment of individual performance.

If the company does not achieve the threshold level of
American's Pre-Tax Earnings Margin, there will be no
financial performance payout. However, a participant retains
any awards earned in 2006 for customer service performance.
When the threshold level of American's Pre-Tax Earnings
Margin is met, participants may be entitled to a payment
under the Plan (refer to the example below).  In this case,
any customer service awards earned during 2006 act as a
"deposit" against the amount to be awarded pursuant to the
financial component.   The amount of the financial
performance payout a participant receives will be the
difference, if any, between what is earned under the
financial performance formula and what has already been
earned through the customer service awards (net of
applicable taxes).







For example (an individual employee's sample annual payout):

Customer Service
1 month - 1st Place            1 x $100 =  $100
3 months - 2nd - 3rd Place     3 x  $50  = $150
8 months - 4th - 6th Place     8 x  $25  = $200
   Customer Service Payout                 $450

Financial - achieve 5% American's pre-tax earnings threshold
and have $40,000 in Eligible Earnings
2.5% x $40,000 =                     $1,000
less Customer Service payout          ($450)
   Financial Payout                    $550

Total Annual payout is $1,000  ($450 + $550), or 2.5% of
Eligible Earnings (net of applicable taxes).

The  AIP  Letters  of  Agreement  provide  that  Other  Cash
Compensation  Programs for management employees  may  be  no
more  than  20% of the maximum possible award  that  was  or
could have been earned by the individual management employee
under  the Plan formula (the "20% Limitation").  Any payment
under the 20% Limitation shall be made by March 15, 2007.

The  Board  has  established a program  that,  based  on  an
individual's performance, anticipates payouts to Level 5 and
above  management employees up to the 20% Limitation. (Level
5  and  above  employees  are not eligible  for  the  Profit
Sharing Plan)  This program is designed to commence payments
at  $500  million in American's pre-tax earnings,  the  same
financial  threshold as exists in the Profit  Sharing  Plan.
This  is  consistent  with the company's  past  practice  of
restricting   payouts   under   any   management   incentive
compensation   program  until  payouts   occur   under   the
corresponding  employee Profit Sharing Plan.  Payouts  under
this  program will cease when the financial threshold  under
the  Plan  (a  5% Pre-Tax Earnings Margin for  American)  is
achieved.  Any payment under the program described  in  this
paragraph shall be made by March 15, 2007.

Although the Board has determined that a program to use  the
flexibility  provided for in the Letters of  Agreement  will
not  commence until reaching a threshold of $500 million  in
American's  pre-tax earnings and will be  discontinued  when
the financial threshold of the Plan is achieved, the company
also  retains the ability to make a payment to an individual
under  the 20% Limitation as provided for in the Letters  of
Agreement.

The  Letters  of  Agreement and related discussions  specify
that   for  purposes  of  the  20%  Limitation,  Other  Cash
Compensation  Programs does not include salary,  stock-based
compensation,  severance, retirement  benefits  or  deferred
payments of base compensation, or eligible cash bonuses from
prior years.


Eligibility for Participation

Customer Service Component:

To earn an award under the customer service component of the
Plan,  an  individual must have been employed as  a  regular
full-time   or   part-time  employee  at  American,   in   a
participating  workgroup (employees in  the  United  States,
Puerto  Rico  and  the  U.S.  Virgin  Islands)  during   the
applicable month to be eligible to participate in the Plan.

The  Committee, at its discretion, may permit  participation
by  employees of Affiliates who have been so employed by the
Affiliate  since the first day in the applicable  month,  if
they become employed by American during the applicable month
during 2006.







In  addition to the terms listed above, in order  for  full-
time  and  part-time employees to earn a  payout  under  the
customer  service measure, an individual cannot  be  on  any
type  of  leave during the applicable month, except approved
FMLA,  injury on duty, military, overage or time-card leave,
as  provided  for  under the company's policies,  collective
bargaining agreement or state law as applicable.

Moreover,  an  individual will not be  eligible  to  earn  a
customer  service award if such individual is, at  the  same
time, eligible to participate in:

     i)   any   incentive   compensation,  profit   sharing,
          commission  or  other bonus plan sponsored  by  an
          Affiliate of American
     ii)  any commission or bonus plan, with the exception of
          American's Profit Sharing Plan or provisions of the
          Annual Incentive Plan, sponsored by American, any
          division of American or any Affiliate of American

In order to earn a customer service award under the Plan, an
individual   must  satisfy  the  aforementioned  eligibility
requirements  and  must be an employee  of  American  or  an
Affiliate at the time an award under the Plan is  paid.   If
at  the  time awards are paid under the Plan, an  individual
has  retired  from American or an Affiliate, has  been  laid
off,  is  on leave of absence with reinstatement rights,  is
Disabled,  or  has  died,  the award  which  the  individual
otherwise  would have received under the Plan but  for  such
retirement,  lay-off, leave, Disability, or  death  will  be
paid  (on  a  pro rata basis) to the individual, or  his/her
estate in the event of death.

The percentage of the payout that an individual receives for
any given month will be determined based upon the percentage
of  his/her  schedule that the individual fulfills  in  that
month.   For Plan purposes, an individual will be considered
to  have fulfilled his/her schedule if he/she actually works
at  least  50%  of  his/her scheduled time (50%  of  monthly
guarantee  hours  for  flight crew)  or  takes  a  scheduled
vacation  or  time-card leave, which, together with  his/her
actual  work  time,  amounts to  at  least  50%  of  his/her
scheduled  time  for  the month. If an individual  does  not
fulfill  his scheduled time due to one of the aforementioned
leaves,  his  award will be pro rated based on actual  hours
worked  in  that  month (vis-a-vis hours scheduled  in  that
month); otherwise, no payment will be made.


Financial Component

To  earn an award under the financial component of the Plan,
an individual must have been employed as a regular full-time
or  part-time  employee  at  American,  in  a  participating
workgroup (employees in the United States, Puerto  Rico  and
the  U.S.  Virgin  Islands) during 2006 to  be  eligible  to
participate in the Plan.

The  Committee, at its discretion, may permit  participation
by  employees of Affiliates who have been so employed by the
Affiliate  during the Plan year, if they become employed  by
American  during  the  Plan year.  In such  instances,  only
eligible earnings at American will be included in the payout
calculation.

Notwithstanding  the forgoing, however, an  individual  will
not   be  eligible  to  participate  in  the  Plan  if  such
individual is, at the same time, eligible to participate in:

     i)   any incentive compensation, profit sharing, commission
          or other bonus plan sponsored by an Affiliate of American
     ii)  any commission or bonus plan, with the exception of
          American's Employee Profit Sharing Plan or provisions of the
          Annual Incentive Plan, sponsored by American, any division
          of American or any Affiliate of American







In  order to earn an award under the financial component  of
the  Plan,  an  individual must satisfy  the  aforementioned
eligibility requirements and must be an employee of American
or  an Affiliate at the time such financial award under  the
Plan is paid.  If at the time such awards are paid under the
Plan,  an  individual  has  retired  from  American  or   an
Affiliate,  has been laid off, is on leave of  absence  with
reinstatement  rights, is Disabled, or has died,  the  award
which the individual otherwise would have received under the
Plan but for such retirement, lay-off, leave, Disability, or
death  may  be paid (on a pro rata basis) to the individual,
or  his/her  estate in the event of death, at the discretion
of the Committee.


Allocation of Individual Awards

The  Committee, in consultation with the Chairman, President
and  CEO  of  American, will approve awards for officers  of
American, including the Named Executive Officers.  The award
for  an  officer  will be equal to an amount  calculated  in
accordance  with  this  Plan,  as  adjusted  for  individual
performance.  Provided, however, that the sum of all  awards
made to officers may not exceed the sum of officer awards as
calculated  in  accordance with this Plan.  Awards  for  the
Named  Executive Officers will be equal to the award  earned
under  the financial component of the Plan.  An award  under
the  Plan to an officer may not exceed the amount set  forth
in  Section  11  of  the 1998 Long Term Incentive  Plan,  as
amended.

The Chairman, President and CEO of American, in consultation
with  the  executive and senior vice presidents of American,
will  approve  awards  for  non-officer  eligible  employees
(Level  5  and above).  An award for a non-officer  will  be
equal  to an amount calculated in accordance with this Plan,
as  adjusted for individual performance.  Provided, however,
that  the  sum  of all awards made to non-officers  may  not
exceed   the   sum  of  non-officer  awards  calculated   in
accordance with this Plan.


Administration

The   Committee  shall  have  authority  to  administer  and
interpret the Plan, establish administrative rules,  approve
eligible  participants, and take any other action  necessary
for   the  proper  and  efficient  operation  of  the  Plan,
consistent with the Letters of Agreement reached  with  each
of  the  unions.  The amount, if any, of the Fund  shall  be
audited  by  the  General Auditor of  American  based  on  a
certification of American's Pre-Tax Earnings Margin by AMR's
independent auditors.  For the Financial Measure, a  summary
of  awards under the Plan shall be provided to the Committee
at  the first regular meeting following determination of the
awards.   To  the extent a Measure is no longer compiled  by
the DOT or Survey America as applicable, during a Plan year,
the  Committee  will  substitute  a  comparable  performance
measure for the remainder of the Plan year.


Method of Payment

The  Committee  will  determine the  method  of  payment  of
awards.   The  financial  awards  shall  be  paid  (net   of
applicable  taxes)  as  soon  as practicable  after  audited
financial statements for the year 2006 are available, but no
later than March 15, 2007.  The customer service measure  is
paid  independently of the financial measure.  The  customer
service  award will be paid (net applicable taxes) quarterly
within  75  days after the DOT Rank and Survey America  Rank
are available and employee eligibility is established.


General

Neither  this Plan nor any action taken hereunder  shall  be
construed as giving any employee or participant the right to
be retained in the employ of American or an Affiliate.







Nothing in the Plan shall be deemed to give any employee any
right,  contractually or otherwise, to  participate  in  the
Plan  or in any benefits hereunder, other than the right  to
receive  payment of such incentive compensation as may  have
been expressly awarded by the Committee.

In  consideration of the employee's privilege to participate
in  the  Plan,  the employee agrees (i) not to disclose  any
trade   secrets   of,   or   other   confidential/restricted
information   of,   American  or  its  Affiliates   to   any
unauthorized party and (ii) not to make any unauthorized use
of   such   trade  secrets  or  confidential  or  restricted
information  during his or her employment with  American  or
its  Affiliates or after such employment is terminated,  and
(iii)  not to solicit any then current employees of American
or any other subsidiaries of AMR to join the employee at his
or  her  new place of employment after his or her employment
with American or its Affiliates is terminated.

The  employee shall not have the right to defer any  payment
under  the Plan.   The Committee and American Airlines shall
not accelerate any payment under the plan.

Notwithstanding  any  provision  to  the  contrary,  if   an
employee  is a person subject to section 409(a)(2)(B)(i)  of
the  Code,  any payment under the Plan due to Retirement  or
termination  of employment for reasons other than  Death  or
Disability   shall  be  delayed  until   the   sixth   month
anniversary  of  the date of the separation from  employment
due to Retirement or termination for Cause.