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AA BK Decision Tues. 20th Sept.?

CHICAGO—In the year since United Airlines and Continental Airlines merged, the economy has weakened and the price of aviation fuel has soared. But business for United Continental Holdings Inc. has been surprisingly rosy.

The Chicago-based airline, now the world's largest by traffic, is on course to turn a $1.4 billion profit this year. It is sitting on an $8.4 billion cash pile, its unit revenue gains are leading the industry and it is moving briskly to repaint its fleet and rebrand its airport terminals.


WTF AMR, 'nuff said....
 
Whatever debt AMR chooses to keep will be what it believes it needs to maintain to run the business going forward.

And, lord knows, there is nothing employee-related that is needed other than the employees themselves; so, right off the bat we can get rid of decent pay rates and pensions. Probably keep medical benefits, but triple the premiums. Reduce number of paid vacation days. Eliminate paid sick leave--after all no state or federal law requires it. Hey, maybe I should be in management. Think of the bonus I could get for these ideas!
 
AMR raises $726 million http://www.google.com/url?url=http://www.bloomberg.com/news/2011-09-27/american-airlines-plans-first-debt-since-january-as-risk-rises.html&rct=j&sa=X&ei=5mmCTpSKKayOsALX3bH5Dg&ved=0CDQQ-AsoATAA&q=AMR&usg=AFQjCNEvaTh24BYlIPTVrXOSaCMn7vvhTg

Not sure if link works

If not go to AA.com

about us

investors relations

and look at the SEC filings 424B3

http://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=IROL-secToc&TOC=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDA5NTAxMjMtMTEtMDg2ODYwL3RvYy9wYWdl&ListAll=1



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SEC Filings
424B3
AMR CORP filed this Form 424B3 on 09/27/11
Entire Document
Entire Subdocument
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Table of Contents

The information in this preliminary prospectus supplement and the accompanying prospectus is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.



Filed Pursuant to Rule 424(B)(3)
Registration No. 333-160646-01
333-160646
SUBJECT TO COMPLETION, DATED SEPTEMBER 27, 2011
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus Dated July 17, 2009)
$725,694,000


2011-2 CLASS A PASS THROUGH TRUST
CLASS A PASS THROUGH CERTIFICATES, SERIES 2011-2

American Airlines, Inc. is creating a pass through trust that will issue American Airlines, Inc. Class A Pass Through Certificates, Series 2011-2. The Class A Certificates are being offered pursuant to this prospectus supplement.

As described herein, American may create a separate pass through trust that will issue American Airlines, Inc. Class B Pass Through Certificates, Series 2011-2. American may, at any time on or after the date of this prospectus supplement, offer Class B Certificates, including by means of this prospectus supplement and a related company free writing prospectus based on the terms and conditions described herein and therein. See “Information Relating to Class B Certificates.”

The Class A Certificates will represent interests in the assets of the related pass through trust. The proceeds from the sale of the Class A Certificates will initially be held in escrow and will thereafter be used by such pass through trust to acquire the related series of equipment notes to be issued by American on a full recourse basis. Payments on the equipment notes held in such pass through trust will be passed through to the holders of the Class A Certificates. Distributions on the Class A Certificates will be subject to certain subordination provisions described herein. The Class A Certificates do not represent interests in, or obligations of, American or any of its affiliates.

Subject to the distribution provisions described herein, the Class A Certificates will rank generally senior to any Class B Certificates that may be issued.

The equipment notes expected to be held by the pass through trust for the Class A Certificates and, if applicable, the pass through trust for any Class B Certificates will be issued for each of (a) 14 Boeing 737-823 aircraft delivered new to American from 1999 to 2001 and 2 Boeing 737-823 aircraft delivered new to American in 2009, (B) 14 Boeing 757-223 aircraft delivered new to American in 1999 and 2001 and (c) 13 Boeing 777-223ER aircraft delivered new to American in 2001. The equipment notes issued for each aircraft will be secured by a security interest in such aircraft. Interest on the issued and outstanding equipment notes expected to be held by the pass through trust for the Class A Certificates will be payable semiannually on April 15 and October 15 of each year, commencing on April 15, 2012, and principal on such equipment notes is scheduled for payment on April 15 and October 15 of certain years, commencing on April 15, 2012.

Morgan Stanley Bank, N.A., will provide a liquidity facility for the Class A Certificates in an amount sufficient to make three semiannual interest distributions on the outstanding balance of the Class A Certificates.

The payment obligations of American under the equipment notes expected to be held by the pass through trust for the Class A Certificates will be fully and unconditionally guaranteed by AMR Corporation.

The Class A Certificates will not be listed on any national securities exchange.

Investing in the Certificates involves risks. See “Risk Factors” beginning on page S-24.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.





Aggregate

Face
Final Expected
Price to

Pass Through Certificates Amount Interest Rate Distribution Date Public(1)

Class A $725,694,000 % October 15, 2021 100%




(1) Plus accrued interest, if any, from the date of issuance.


The underwriters will purchase all of the Class A Certificates if any are purchased. The aggregate proceeds from the sale of the Class A Certificates will be $725,694,000. American will pay the underwriters a commission of $ . Delivery of the Class A Certificates in book-entry form will be made on or about , 2011 against payment in immediately available funds.

Joint Bookrunners


MORGAN STANLEY DEUTSCHE BANK SECURITIES
Joint Structuring Agent Joint Structuring Agent
GOLDMAN, SACHS & CO. CREDIT SUISSE CITIGROUP




The date of this prospectus supplement is , 2011.


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So the question is if you read the SEC filings 424B3

page s-24 risk factors

why would any institution buy into the certificates

RISK FACTORS
In considering whether to purchase the Certificates, you should carefully consider all of the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus and any related company free writing prospectus, including but not limited to, our and AMR’s Annual Reports on Form 10-K for the year ended December 31, 2010, our and AMR’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011 and other information which may be incorporated by reference in this prospectus supplement and the accompanying prospectus after the date hereof. In addition, you should carefully consider the risk factors described below, along with any risk factors that may be included in our future reports to the SEC.
Risk Factors Relating to the Company
Our ability to become profitable and our ability to continue to fund our obligations on an ongoing basis will depend on a number of risk factors, many of which are largely beyond our control.
As a result of significant losses in recent years, our financial condition has been materially weakened.
We incurred significant losses in recent years, which has materially weakened our financial condition. We lost $892 million in 2005, $821 million in 2004, $1.3 billion in 2003, $3.5 billion in 2002 and $1.6 billion in 2001. Although we earned a profit of $356 million in 2007 and $164 million in 2006, we lost $2.5 billion in 2008 (which included a $1.0 billion impairment charge), and, primarily as a result of very weak demand for air travel driven by the severe downturn in the global economy, we lost $1.5 billion in 2009 and $469 million in 2010. In addition, we lost a total of $715 million in the first two quarters of 2011 (including a $31 million non-cash charge). Because of our weakened financial condition, we are vulnerable both to the impact of unexpected events (such as terrorist attacks) and to deterioration of the operating environment (such as a significant increase in jet fuel prices or significant increased competition).
The severe global economic downturn resulted in very weak demand for air travel and lower investment asset returns, which has had and could continue to have a significant negative impact on us.
Although demand for air travel has improved as the global economy continues to recover from the recent severe downturn, demand continues to be weak by historical standards. In response to weak demand, we have implemented a number of capacity reductions since late 2008, and we have announced an additional capacity reduction to be implemented in the fourth quarter of 2011. In connection with the capacity reductions we have implemented, we have incurred special charges related to aircraft, employee reductions and certain other charges. Demand for air travel may weaken if the global economy does not continue to recover. No assurance can be given that capacity adjustments or other steps we may take in response to changes in demand will be successful. Capacity reductions or other steps might result in additional special charges in the future. Further, other carriers may make capacity adjustments which may reduce the expected benefits of any steps we may take to respond to changes in demand. Industry-wide capacity may increase to the extent the economy continues to recover from the global recession. If industry capacity increases, and if consumer demand does not continue to pace those increases, we, and the airline industry as a whole, could be negatively impacted.
The economic downturn has resulted in broadly lower investment asset returns and values. Our pension assets suffered a material decrease in value in 2008 related to broader stock market declines, which resulted in higher pension expense in 2009 and 2010 and will result in higher pension expense and higher required contributions in future years. In addition, under certain circumstances, we may be required to maintain cash reserves under our credit card processing agreements and to post cash collateral on fuel hedging contracts. These issues individually or collectively may have a material adverse impact on our liquidity. Also, disruptions in the capital markets and other sources of funding may make it impossible for us to obtain necessary additional funding or make the cost of that funding prohibitive.
S-24

ect. ect.ect
 
When will we know if AMR was successful raising the $700 million plus of new debt?
 
When will we know if AMR was successful raising the $700 million plus of new debt?

Already a done deal - the only open issue is the interest rate, which will probably be set today or tomorrow.
 
AMR at some point servicing their debit will become insurmountable and BK 11 will become inevitable. All airlines are operating under the same business conditions as AA as far as fuel prices, capacity discipline, operating costs. AA must step up and run the company and get their costs in line with the the profitable operators. Blaming labor, oil prices ect. may or may not be true based on blogers opinions, but the facts are AMR continues to lose money and the rest of the industry is turning around and making a profit in the current economic times, AMR is not.
 
AMR at some point servicing their debit will become insurmountable and BK 11 will become inevitable. All airlines are operating under the same business conditions as AA as far as fuel prices, capacity discipline, operating costs. AA must step up and run the company and get their costs in line with the the profitable operators. Blaming labor, oil prices ect. may or may not be true based on blogers opinions, but the facts are AMR continues to lose money and the rest of the industry is turning around and making a profit in the current economic times, AMR is not.

Then AA is continuing to be inept management by not filing bankuruptcy and allowing yet another day go by where they go further in debt.
But remember this, inept management BEFORE bankruptcy is still the same inept management DURING and AFTER bankruptcy!
 
usually, a reorganization in BK results in a change of mgmt... so it is unlikely that the current mgmt group could take AA into BK, manage it through BK, and then come out on the other side still in charge.
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And that realities raises the issue that bankruptcy wipes out common stockholder interests but it usually wipes out mgmt's interests in the company as well.
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There are few incentives to remove what is working, even poorly, in BK.
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There are strong forces working against a BK filing even if it means that what employees will have to endure to turn the company around will ultimately be larger and the company could well be a weaker competitor once it is able to successfully reorganize.
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It is likely only the company knows the debt maturities securing all of their current aircraft; the latest debt filing shows that as long as AA can get financing and restructure its current debt, this process of limping along could go on even for quite a bit longer. At some point, AA's level of debt service will be so much higher than its peers that it will have to either significantly increase revenues or reduce costs somewhere else to compensate.... how all of those pieces might fit together are far from certain.

BTW, Emirates' decision to add service to DFW could significantly effect many of the benefits that AA/BA/IB could receive from the joint venture since EK is famous for stimulating the market and aggressively pricing beyonds which they can carry over DXB... in so much as East Africa, Middle East, and South Asia traffic is part of the oneworld strategy, those markets could become alot less attractive.
 
AMR hits it's 52 week low today at 3.12 and it's still early. I still say tick...tock...tick...tock...

And no, no other airline has even come close!!
 
usually, a reorganization in BK results in a change of mgmt... so it is unlikely that the current mgmt group could take AA into BK, manage it through BK, and then come out on the other side still in charge.
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I would like to believe that, but my gut instinct tells me that Arpey and company would plead to keep the current managment squad in place "ER, UH, YOUR HONOR, TO ,ER, KEEP, THE KEY TALENT, AT, ER, YOUR HONOR, WE NEED TO KEEP THE , ER, KEY TALENT IN PLACE TO , ER, YOU KNOW YER HONOR, TO KEEP THIS SHIP RIGHTED."
 

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