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AMR CORPORATION DISAPPOINTED BY S&P MOVE TO DOWNGRADE MOST CLASSES OF AMR'S AND AMERICAN AIRLINES' DEBT SECURITIES

 DFW AIRPORT, Texas, March 11 /PRNewswire/ -- AMR Corporation (NYSE: AMR) said today it was disappointed but not surprised by Standard & Poor's move to downgrade most classes of AMR's and American Airlines' debt securities to non-investment grade.
 "We are troubled by the rating agency's action, because it underscores the dismal financial condition of the U.S. airline industry," said Michael J. Durham, senior vice president and treasurer of AMR and chief financial officer of American.
 S&P said it lowered the airline's ratings because of industry overcapacity, foreign investment in U.S. airlines, cost disadvantages versus weaker carriers and weak passenger demand.
 American Airlines' Equipment Trust Certificates (used to secure debt on aircraft) were lowered from BBB+ to BBB-, the only class of debt that remained investment grade. Durham noted that American's ETC's are now the only investment grade instrument in the U.S. airline industry, with the exception of Southwest Airlines' securities.
 Standard & Poor's lowered AMR's senior unsecured debt from BBB to BB+, AMR's subordinated debt and preferred stock was lowered from BBB- to BB-, and the company's commercial paper rating dropped from A-2 to B. All are non-investment grade.
 "S&P actions will not affect AMR's plan to shrink the airline and focus more on its non-airline activities," Durham said. "We decided two years ago to cut airline capital spending by $8 billion and infuse more equity into the company. As a result, we have already met virtually all of 1993's financing requirement, and we anticipate that we could, if necessary, meet our 1994 and 1995 financing requirements with internally Generated cash.
 "Nevertheless, we are dissatisfied with a credit rating that is commonly referred to as junk," he said.
 While the downgrade may have no immediate impact on AMR's and American's financing plans, "a downgrade to non-investment grade will restrict access to virtually all debt markets and increase the cost of capital," Durham said. "This will make it more difficult and expensive to raise capital if and when the need arises."
 -0- 3/11/93
 /CONTACT: Andrea Rader, corporate communications of AMR Corporation, 817-931-0176/
 (AMR)


CO: AMR Corporation ST: Texas IN: AIR SU: RTG

WB -- NY083 -- 5282 03/11/93 17:09 EST
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Date:Mar 11, 1993
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