SecProbe.io

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                                        May 31, 2006

VIA EDGAR

David R. Humphrey, Accounting Branch Chief
Division of Corporate Finance
U.S. Securities and Exchange Commission
100 F Street N.E.
Washington, DC  20549

Re:  AMR Corporation
     Form 10-K filed for the year ended December 31, 2005
     Filed February 24, 2006
     File No. 1-8400

Dear Mr. Humphrey:

This letter sets forth AMR Corporation's (AMR or the
Company) responses with respect to the staff's comment
letter dated May 18, 2006 on AMR's Form 10-K for the year
ended December 31, 2005 and AMR's Form 10-Q for the quarter
ended March 31, 2006.  The numbered responses in this letter
correspond to the numbered paragraphs from the comment
letter.  Both the staff's comments and AMR's responses have
been included.

Item 7.  Management's Discussion and Analysis
Other Information
Critical Accounting Policies and Estimates, page 39

1.   We note that you use the incremental cost method to
     account for your frequent flyer liability.  Please tell us,
     and if material include a discussion, whether you expect
     your estimated liability to be significantly affected in
     future periods due to the escalating cost of fuel.

Response:  As described in multiple parts of the Company's
2005 Form 10-K (most specifically in Item 7(A) "Quantitative
and Qualitative Disclosures about Market Risks") the
Company's operations are significantly affected by
volatility in the cost of fuel.  The Company includes
changes in the cost of jet fuel in the incremental cost
equation by using a twelve-month rolling average that is
updated and reflected monthly in the frequent flyer
liability.  The relatively short twelve-month rolling
average incorporates recent fuel price trends in the
frequent flyer liability.  The Company believes the use of a
historical rolling average is a better predictor of future
cost than using current spot prices or forward prices, due
to the volatility of those prices.  From the end of 2004 to
the end of 2005, the increase in the price of jet fuel was
consistent with the increase in the price of fuel used for
calculation of the incremental cost for the Company's
frequent flier liability.  Any future increase in fuel costs
would result in a proportional increase in the future fuel
cost liability to the extent the Company has not hedged the
exposure.  However, the Company does not expect the amount
of any resulting increase in the frequent flyer liability to
be significant.

                         1

Note 1 - Accounting Policies (Restricted Cash), page 52

2.    We have noted that a number of registrants in your
      industry (airline carriers) have had cash held back
      ("cash reserves") with credit card processors or other
      financial institutions as collateral to support credit
      card holdbacks for advance ticket sales made by customers
      as security for the potential exposure of unused tickets
      that affords customers with certain protections under
      federal laws (governing credit card use) in the event
      that an airline fails to fulfill its travel obligation,
      including the bankruptcy of the airline.  In this regard,
      we also note that funds are not made available to the
      airline until the related travel service is provided.  It
      is our understanding that registrants may classify the
      amount of cash holdbacks as "Restricted Cash" on their
      balance sheet until the cash is received by the airline
      upon the occurrence of the scheduled flight departure.
      From the disclosures in the accounting policy notes, it
      is unclear whether your consolidated financial statements
      contain any cash holdbacks ("reserves") of this type that
      have been classified as "Restricted Cash".  Please advise
      accordingly.

Response:  The Company has been required to provide a cash
holdback to its primary credit card processor; however, the
structure of the Company's holdback is different from the
arrangements applicable to other carriers as described by
the staff in its comment letter.  The holdback is not
contractually determined as a percentage of the Company's
outstanding ticket sales, but was a one-time, negotiated
amount that was fixed at the time the holdback was
established.  As such, the credit card processor retained
$120 million in 2003 for potential credit risk exposure,
which resulted in a reduction to cash flows from operations
during that year since the cash was not remitted to AMR.  In
addition, the Company recorded the holdback in Other Long-
term Assets, not Restricted Cash, in the Consolidated
Balance Sheet.  At this time, the Company has no expectation
that the $120 million will be returned to the Company in the
next twelve months and it continues to be classified as a
long-term asset.

3.    However, we note that your consolidated statement of
      cash flows reflect all changes in "restricted cash" as an
      investing activity.  If your "restricted cash" includes this
      type of cash reserves described above, it appears that
      classification of the increase in "restricted cash" as an
      investing activity at the date a ticket is sold may not be
      appropriate.  As such, operating cash flows would be
      favorably impacted on the initial date of a sale of an
      airline ticket by the increase in deferred revenue of the
      ticket sale, while the increase in "restricted cash" is
      classified as an investing activity.  As the airline is not
      entitled to the receipt of these cash reserves until the
      occurrence of the scheduled flight departure, it appears one
      can view the cash holdback amounts in a manner similar to an
      uncollected amount billed to a customer (i.e. trade account
      receivable) as opposed to a collection from a customer
      followed by an investment in "restricted cash".  In the
      alternative, the uncollected amount that is restricted as to
      its ultimate collection until the fulfillment of the
      carrier's travel obligation could also be afforded treatment
      as a non-cash transaction in accordance with paragraph 32 of
      SFAS 95, on the date the ticket is sold.  The treatment in
      either of these views would not impact operating cash flows
      on the date the ticket is sold, as it appears that operating
      cash flows should not be impacted until the travel
      obligations is completed and the company is entitled to the
      cash from this revenue producing activity.  It also appears
      that footnote 1 of SFAS 95 would not apply directly or by
      analogy to these circumstances as (i) the cash on hand with
      other financial institutions applies directly to the
      definition of what constitutes "unrestricted" cash & cash
      equivalents in the statement of cash flows; and (ii) the
      "bank's granting of a loan by crediting the proceeds to a
      customer's demand deposit account is a cash payment by the
      bank and cash receipt by the customer when entry is made"
      appears to apply to the customers ability to access
      "unrestricted" funds loaned by the bank or financial
      institution when loaned funds are available.

                             2

  In the event your consolidated financial statements
  include any amounts of "restricted cash" as described
  above, please furnish us how (the amounts) your
  consolidated statement of cash flows would be impacted
  for each of the last three fiscal years if there is no
  impact on operating cash flows in treating this item
  similar to a trade receivable or as a non-cash
  transaction at the date a ticket is sold, as opposed to
  classifying the amount of "restricted cash" as an
  investing activity upon the sale of a ticket under these
  circumstances.  In addition, please consider the views
  above and tell us why you believe your accounting
  treatment is appropriate under these circumstances.  If
  necessary, please revise your consolidated statement of
  cash flows, accordingly.

Response:  The Company has no transactions structured as
described above.

Note 1 - Accounting Policies (Property & Equipment), page 53

4.    In the beginning of fiscal 2005, we note that you
      changed the depreciable lives of your Boeing 737-800, Boeing
      757-200 and McDonnell Douglas MD-80 aircraft from 25 years
      to 30 years.  This change in expected useful lives was
      accounted for as a change in estimate that prospectively
      reduced your depreciation and amortization expense by
      approximately $108 million in the fiscal year ended December
      31, 2005.  In this regard, the change materially reduced
      your fiscal 2005 operating loss and net loss (including the
      related per share amounts) by approximately 55% and 12%,
      respectively.  It appears this change will continue to
      materially impact your results of operations in future
      periods.  As your disclosure is vague and solely limited to
      describing the material change as "to more accurately
      reflect the expected useful lives", we are unclear on the
      changes in events and circumstances that warrant this
      revision in depreciable lives for certain of your aircraft.

5.    We note that other major carriers generally limit the
      life of all aircraft to a maximum of 25 years.  In
      addition, your consolidated financial statements in four
      of the last five fiscal years reflect material aircraft
      charges for the "accelerated" retirement of various
      aircraft and permanently grounded and retired MD-80
      aircraft.  Furthermore, it appears the effects of (i)
      obsolescence; (ii) demand; (iii) economic factors
      (including stability of industry and cost of fuel
      necessitating more fuel-efficient aircraft); (iv)
      technological advances; (v) level of maintenance
      expenditures required to obtain the expected future cash
      flows from the assets relative to its carrying value as
      the aircraft ages, etc. may suggest a limited useful life
      that does not warrant an extension from its prior useful
      life.  In view of all the factors noted above, we have
      significant concerns as to the appropriateness of your
      change made to increase the estimated useful life of
      certain aircraft.

                            3

      With respect to this material change, please completely
      and clearly provide us with the following information on
      this matter:

  o  The change in events and circumstances that warranted a
     revision in depreciable lives of these aircraft as of the
     beginning of the fiscal year 2005;

  Response:  Beginning in 2001, the Company's financial
  condition rapidly deteriorated to the point that, among
  other things, it was forced to drastically reduce its
  planned capital spending.  In addition, as disclosed in
  AMR's 8-K filing on November 22, 2004, American deferred
  the delivery date of 47 Boeing 737-800 aircraft by seven
  years.  As a result of the deferral, American has no
  narrow body deliveries scheduled until 2013, a gap in
  deliveries unprecedented in the history of the Company
  since deregulation in 1978.  The Company also recognized,
  and incorporated in its fleet planning at the time, that
  replacement of just the Company's large fleet of MD-80
  aircraft by the age of 25 would require the Company to
  take delivery of an average of 20 aircraft per year over
  the next 16 years and would cost over ten billion
  dollars.  The Company's financial condition, the decision
  to defer delivery of aircraft in late 2004 and the fact
  that the Company's fleet plan anticipates operating the
  aircraft in question to 30 years mandated the change of
  depreciable lives of its narrow body fleet.  Additional
  detail related to the rationale for changing the
  depreciable lives is discussed below.

  o  The empirical evidence relied upon that objectively
     justifies and supports this change in estimated useful lives
     of these depreciable assets;

  Response:  Accounting Research Bulletin 43 states that
  generally accepted accounting principles require that an
  asset be depreciated over its expected useful life.  The
  evidence that we relied on to support the change to a
  longer useful life was:

  -  The Company's fleet plan required at least a 30 year
     useful life for these aircraft and the physical condition of
     the aircraft would allow them to be flown for 30 years or
     more.

  -  The absence of scheduled narrow body deliveries until
     2013 (even those 47 deliveries would only replace nine
     percent of the Company's existing narrow body fleet of 547
     aircraft assuming the deliveries are not used to grow the
     Company's capacity at that time).

  -  The financial condition of the Company, which
     significantly limited its flexibility to purchase new
     aircraft.

  -  Absence of technology step change for narrow body
     aircraft, such as technology that would allow the
     Company to fly its aircraft using fewer pilots or fewer
     engines (as was the case with replacements for previous
     generation aircraft such as the B-727), that would
     clearly economically compel the Company to replace the
     fleet.  In fact, Northwest Airlines is currently
     operating its DC-9 aircraft, which is an earlier
     version of AMR's MD-80 aircraft, well beyond 30 years.

  -  There are currently no government regulations, such as
     noise reduction requirements, that would require
     aircraft replacement.

                              4

  o  All the unique characteristics and features of these
     three types of aircraft that support a greater useful
     life than your other aircraft.  In addition, please
     specifically tell us why these two types of Boeing
     aircraft warrant an extension of life while other
     Boeing aircraft in your fleet currently have shorter
     estimated useful lives or were "accelerated" in their
     retirement during the last five years;

  Response:  All of American's fleet types are currently
  depreciated over 30 years except for the Airbus A300, and
  the Boeing 767.  The A300 and B-767 have shorter lives
  due to unique characteristics of these fleet types.  The
  A300 is a small fleet for the Company (34 aircraft - 10
  owned and 24 operating leased) with limited application
  in our network, and ultimately not generating the same
  economies of scale as our larger fleet types.  As part of
  the fleet simplification efforts discussed below, AMR
  plans to cease using these aircraft as the related
  operating leases expire over the next several years, and
  recorded a fleet impairment charge in 2003 for the
  planned accelerated retirement.

  The B-767 is being replaced in the market place by new
  technology Boeing and Airbus aircraft which are being
  represented by the manufacturers as being significantly
  more efficient and having significantly longer range than
  the B-767.  Since these replacement aircraft will be
  available as soon as 2008, the Company did not increase
  the depreciable life for the B-767.  No similar new
  technology replacement suitable for the B-737, B-757 or
  MD-80 missions in our network is currently offered or
  anticipated to be available in the near future.

  Please refer to the discussion below regarding previous
  accelerated fleet retirements.

  o  The consideration given to your prior history of
     "accelerating" the retirement of aircraft in justifying this
     change to increase the estimated useful life of these
     aircraft;

  Response:  Well before the events of September 11, 2001,
  the Company had implemented an initiative to reduce the
  number of fleet types operated by American as the large
  number of fleet types created a competitive cost
  disadvantage aga