AMERICAN AIRLINES TO RETIRE ADDITIONAL AIRCRAFT

American Airlines today announced that it would accelerate the retirement of five additional Boeing 727 aircraft. The aircraft will be grounded during the fourth quarter of 2001 and the first quarter of 2002, rather than in 2003, as originally planned. In addition, American will retire its remaining four MD-11 aircraft by Nov. 1, ahead of its previous plan to retire this fleet near year end.

These actions are the most recent in a series of steps taken by American to match its fleet and capacity plans to the weaker economic climate. American announced in June that it would advance the retirement of 22 aircraft, including TWA’s entire fleet of 19 DC-9s, two Boeing 727s and one Fokker 100. In July, American arranged not to take delivery of five used MD-80s that were scheduled to join the fleet this year as part of the TWA asset acquisition. And just earlier this month, American announced that it would ground five Boeing 727s, originally scheduled to leave the fleet in 2003, by the end of 2001.

"This action is consistent with similar steps American has taken during recent months to better align capacity with lower demand," said Tom Horton, American’s senior vice president and chief financial officer. "This is a very difficult time in the airline business, and we see no near-term improvement. We will continue to evaluate further cuts in capacity and capital spending as conditions warrant."

Horton noted that, as a result of these various actions, American will hold capacity nearly flat in 2001, with a reduction of almost 1% in 2002.