FORT WORTH, TX, ( July 16, 2003 – AMR Corporation has decided to reduce the size of its St. Louis hub by nearly fifty percent and close its reservation office as part of a major cost-savings and turnaround plan. Total departures at Lambert-St. Louis International Airport will be reduced from 417 a day to 207 a day.

Last September, American Airlines and Lambert-St. Louis International Airport announced a $21.7 million package to make the airport experience more convenient with improvements to the American Airlines and AmericanConnection terminals and expansion of the B and C-D security checkpoints. The Airport is currently in the midst of an $1.1 billion expansion to increase its capacity as the nation’s fifteenth largest facility with the addition of new runways and gates.

In an announcement, Gerard Arpey, AMR’s president and CEO stated, “We are going to make it a smaller hub that will primarily cater to the people who live, work, or do business there. “Our other options were far less palatable, including the extreme of simply making St. Louis a spoke city with service only to our other hubs. Our current plan allows us to provide key services for the local community while strengthening our hubs at Chicago and Dallas/Fort Worth.”

Arpey also acknowledged the support for the airline and genuine concern for the community shown by government officials and local business leaders during American’s decision-making process, particularly St. Louis Mayor Francis Slay, County Executive Buzz Westfall and Missouri Governor Bob Holden.

Between American, American Eagle and the AmericanConnection carriers, St. Louis will offer 207 flights a day to 68 cities after the change, which is effective Nov. 1. American will maintain its pilot and flight attendant bases there.

The efficiency review also concluded that the airline had too much domestic Reservations capacity, even though it had closed two Reservations facilities earlier this year. Accordingly, the airline will close its St. Louis Reservations office effective September 15.

American will make available a variety of support services to employees impacted by the closing of the St. Louis Reservations office and to employees at American’s St. Louis airport operation who may be displaced by the schedule changes.

As previously announced, American’s fleet, which already has 57 fewer airplanes in revenue service than a year ago, will shrink another 57 airplanes by summer 2004. At that point, the airline’s fleet will be roughly the same size it was in mid-2000.

Additionally, the airline has been looking at how it schedules maintenance work at its three major maintenance bases. That portion of the study is ongoing. American expects to announce its decision on this issue by the fall.

The AMR reported a net loss of $75 million, or $.47 per share. The company stated in its report issued July 16, that it had made significant progress over the course of the second quarter, with a total cash and short-term investments balance on June 30 of $2.4 billion (including $550 million in restricted cash and short-term investments), an increase of $555 million compared to the comparable balance at the end of the first quarter. Since June 30, AMR has completed a $250 million aircraft financing, bringing the total balance to $2.7 billion as of today.