amr corp investor report

7/28/2019 AMR Corp Investor Report

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Investment Report:

AMR Corporation (AAMRQ)

Adam R. WolkenBADM2003W

4/1/2013


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Investor Report: AMR Corporation

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Table of Contents

Introduction 3Qualitative Analysis

SWOT 5PEST 7Modernizing the Fleet 10Building the New American 11

Quantitative AnalysisTrend Analysis 12Forward P/E Ratio 12PEG Ratio 13RPM Metrics 14

Recommendation 15Executive Summary 16

Works Cited 17Appendix 18


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Introduction and Investing Thesis

Warren Buffett, long time venture capitalist and billionaire, once said, Indeed, if a farsighted

capitalist had been present at Kitty Hawk, he would have done his successors a huge favorby shooting Orville down1.This statement, while true to the airline industry as a whole,does not encompass the possibility of a good short-term position in an airline stock. A goodairline investment is grounded in both qualitative and quantitative analysis. Because of thevolatility in the travel industry, investing in an airline requires an in-depth analysis of factorsranging from load reports and revenue miles to fleet modernization along with the typicalfinancial statement analysis. Before addressing various qualitative analytics on AMRreorganization one must look at the bigger picture and the industry as a whole.

Airlines are an abysmal financial industry from the start. The margins are slim, fuel costs arehigh and competition is fierce. In fact, that is the reason that most airlines have to include aclause in their annual report and 10-K that reads, Our ability to become profitable and ourability to continue to fund our obligations on an ongoing basis will depend on a number ofrisk factors, many of which are largely beyond our control2. The report then goes on to listover five pages of various risk factors including: environmental, political, price control,economic security and even terrorism2. September 11, 2001 had a profound effect on analready plagued industry as passenger load percentage decreased annually over the next fiveyears after2.

American Airlines was originally founded in 19342. All of their stock is owned by the parentcompany AMR2. At year-end of 2012, American provided jet service to over 160 destinations

throughout North America, the Caribbean, Latin America, Europe and Asia. AMR alsoowns American Eagle Holding Corporation, which operates two regional airlines that dobusiness under the American Eagle Brand. American, combined with American Eagle andother third-party regional feeder jets, provide service to over 250 cities in 50 countries withover 3,400 flights a day2. Combined, the fleet exceeds over 900 aircraft2. American Airlineswas also the founding member of the OneWorld Alliance, which is the largest airline alliancein the world. Finally, American is also one of the largest scheduled air freight carriers in theworld, providing a wide range of both freight and mail service to shippers onboardAmericans passenger fleet2.

Currently, AMR Corporation is undergoing bankruptcy proceedings through their filing ofChapter 11 in September of 20113. This process continues to be ongoing but the airlinemade significant progress in February by announcing their merger with US Airways3. Thismerger provides many benefits, many of which we will look into more detail later. American,

1 "Best Warren Buffett Quotes | Editor's Desk at Equities.com." Best Warren Buffett Quotes | Editor's Desk at Equities.com.N.p., n.d. Web. 29 Apr. 2013.2 AMR Co., 2012 Annual Report, Feb. 20, 2013, from AMR Co. investor relations website,http://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhome, accessed April 29th, 20133 "AMR Files Bankruptcy-Exit Plan Based on US Airways Merger." Bloomberg. N.p., n.d. Web. 29 Apr. 2013
http://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhome


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the United States oldest and most storied carrier, is at one of their lowest points during theirhistory. This primes them as a potential value penny stock for investors. The rest of thispaper will outline both qualitative and quantitative trigger points on why an investment inAmerican Airlines at this stage is the correct one. This investor report will strive to addressthe potential benefits of a short-term investment holding in AMR Corporation stock (OTC:

AAMRQ) and will discuss the current implications of the merger between US AirwaysHolding Company (LCC.NYSE) and AMR.


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Qualitative Analysis

SWOT

We Know Why You Fly has been the slogan of American Airlines, the premier carrier of

the United States, for over ten years now. During that period, American has experienced anextreme financial cycle that has left it struggling to reform itself. Stiff competition from low-cost carriers combined with hard economic times have forced American into Chapter 11proceedings to ultimately merge with US Airways (LCC). In order to better understand thefull situation of the airline we can break down its market position into strengths,weaknesses, opportunities and threats.

Strengths

American Airlines has been one of the longest running carriers in the United States (over 60years) and has arguably the best brand recognition among the major airlines2. Its brandlivery, the steel airframes punctuated by patriotic red and white colors, is widely recognizedamong premium flyers as a staple of the industry. Besides the brand, American has built anextremely strong and dependent airline hub system situated at both Dallas Fort-WorthAirport and Chicago Ohare. Both hubs have grown over the past 10 years and have placedAA as a strong domestic carrier with one of the largest route systems in the country. Bothhubs have also opened up international routes (DFW to South America and ORD to Canadaand Europe)2. Finally, American has one of the strongest customer loyalty programs inAAdvantage4. The program has connections to almost every major credit and travel agencywhile also continuing the same brand recognition as the airline4. It is the largest frequent flierprogram and was the first such one to be enacted for a US Domestic Carrier.

Weaknesses

While AA has a strong foothold in certain cities (DFW, ORD and BOS for example) theyare continuing to lose market share to other competitive players5. More specifically, low costairlines like Southwest and JetBlue have continued to be a major player in smaller cities thatopen up American to some major competition5. Other carriers (including the new mergerpartner US Airways) continue to compete in major cities and are thus applying significantfinancial pressure on American to up their load factors and seat revenue on their largeroutes. Finally, Americans current Chapter 11 proceedings are causing significant financialstrain on the company2. The lack of working capital to grow over time is stretching thecompany thin combined with the legal proceedings are both putting pressure on the airlineto perform. It has also recently made significant commitments to purchasing a younger fleet,

which although is a great investment, costs significant capital that American just doesnthave right now.

4 "American Airlines AAdvantage Program Named Airline Program Of The Year At The 2013 Freddie Awards - SeekingAlpha."American Airlines AAdvantage Program Named Airline Program Of The Year At The 2013 Freddie Awards - Seeking Alpha.N.p., n.d. Web. 1 May 2013.5 "Legacy vs. Low-Cost Carriers: Spot the Difference." The Economist. The Economist Newspaper, n.d. Web. 1 May 2013.


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Opportunities

There are many opportunities for growth at American. First, they are in the midst of amerger with another large carrier (US Airways)2. This merger will also be discussed at lengthlater but will provide significant opportunity for the company to grow its routes and become

a larger player in the international market. Second, they are in the process of purchasing ayounger fleet from both Airbus and Boeing2. This fleet will consist of newer 737-800s alongwith A320s with the hope of phasing out the fuel workhorse MD-83s. This will giveAmerican an edge in terms of fuel efficiency in a time that saving every penny can literallymean the difference between profit and bankruptcy. Finally, the company can capitalize onnew code share agreements with some of US Airways partners after the merger. These newagreements will provide more flexibility to Americans customers and also give a better all-around service to AAdvantage members.

Threats

There are three main threats facing American currently. First, increasing fuel and labor costs

over the past few years have caused significant financial hardship on the industry as a whole.American has been hit extremely hard already but with significant economic instability in thefuture, the company faces much uncertainty in terms of fuel. Second, pressure fromregulatory bodies and government organizations has the potential to hurt the airline industryfurther than it already has. This will have a significant impact on the terms of the mergerwith US Airways (mainly in terms of union and merger agreements) and also on theregulation of the industry as a whole. Finally, low-fare service providers continue todemonstrate a threat to premium brands like American and United. Southwest and JetBlue(as examples) provide the same or similar route service at a much cheaper cost which(especially in a down economy) provides a major threat to an expensive carrier. Americanmust find a way to differentiate themselves in the months and years to come.


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PEST

Another important qualitative indicator of growth is the PEST breakdown. This breaks acompanies various problems into a Political, Economic, Social and Technological analysis. Indoing this, it allows investors to look deeper into various qualitative growth indicators that a

SWOT analysis wouldnt normally show.

Political

According to the 2013 10-K, the Company is subject to extensive domestic andinternational regulatory requirements. The Airline Deregulation Act of 1978, as amended,eliminated most domestic economic regulation of passenger and freight transportation.However, DOT and the Federal Aviation Administration (FAA) still exercise certainregulatory authority over air carriers2. This clause is indicative of a much larger problemplaguing the airline industry as a whole. After the Deregulation Act of 1978, the industry hasfaced stiff competition causing multiple bankruptcies and significant financial trouble. Morerecently however, airlines are facing stiffer regulation due to recent budget cuts due to the

sequestration6. According to NPR, if the spending cuts, known in Washington-speak assequestration, start taking effect on schedule, the importance of that backstage work willmove front and center6.This backstage work will affect the airline industry in multipleways, most noticeably being the amount and length of delays6. Delays cause significantfinancial hardship on an airlines operations because the company simply isnt moving theiraircraft around and injecting revenue miles into their operation. This decreasing revenuecan cause other hardship on an industry where the difference between profitability and losscan be two or three full flights6.

Economical

Figure 17

The economics surrounding the airline industry make it extremely competitive to even stay

6 Naylor, Brian. "One Place You May Notice The Sequester: At The Airport."NPR. NPR, 21 Feb. 2013. Web. 1 May 2013.7 "The Future Economics of the Airline Industry: A Changing Vernacular."Massachusetts Institute of Technology. MITInternational Center for Air Transportation, n.d. Web. .


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afloat. The sheer volatility of the industry, as indicated in Figure 1, has made the industryextremely variable to oil shocks and other natural disasters. This volatility affects AMR evenmore so than other airlines because of their current Chapter 11 proceedings2. Aircraft fuelhas beenAMRs largest single operating expense in recent years, and income results are verysignificantly affected by the cost, price volatility and the availability of jet fuel, which are in

turn affected by a number of factors beyond the firms control. Key to solving some of theeconomic problems associated with price volatility is going to be the diversification of routeportfolios7. As indicated in Figure 2, there will be a higher demand for international routes,specifically trans-pacific ones, in the next 15 years. This high demand will allow modernairlines to capitalize on gains internationally and supplement their losses in the US domesticmarket.

Figure 27

Social

Social threats are alive and exist significantly in the airline industry. Post-September 11 th fliersare defined by a more realistic economic man as discussed by behavioral economics.September 11th, a day that changed so much around our country hit one industry the hardest.After 9/11, we were on our knees within one hour8. Between 2001 and 2011, the nations10 largest airlines lost a combined $29 billion attributed to a decreased demand in air travel.A rational economic man would not factor in the events of 9/11 and chalk them up solelyto the risk of flying in general but a non-economic man has the choice. The fears after9/11 were real and caused such a deep decline in the industry that the nations five largestcarriers all filed for bankruptcy9. 9/11 indicated a much larger threat to the airline industrythat even AMR includes in their 10-K each filing, Actual or threatened U.S. militaryinvolvement in overseas operations has, on occasion, had an adverse impact on our business,

financial condition (including access to capital markets) and results of operations, and on theairline industry in general.2

8 Martn, Hugo. "10 Years after 9/11, the Airline Industry Is Looking up." Los Angeles Times. Los Angeles Times, 10 Sept.2011. Web. 29 Jan. 2013.


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Technological

AMR Corporation and American Airlines have been pioneers in the usage of world-classtechnology within the cockpit to reduce expenses and increase safety9. In late 2012, AMRfiled a proceeding with the FAA to allow their pilots to use an electronic flight bag9 whichconsisted of an iPad for pilots holding all charts and information contained in their normal30+ pound bag. This change will reduce fuel expenses by about 500,000 gallons of fuel peryear9. How? Each bag weighs 40 pounds and is reduced to a 3-pound electronic machinecontaining all the same information as before. This reduction will actually lead to an increasein safety measures, as the iPads will have access to more updated charts and real-timeweather information than previously accessible9. AMRs move to a more tech-savvy airlineisnt going unnoticed and is part of their transition to becoming a new American which wewill discuss next2.

9 "American Airlines Pilots Get Nod to Use IPad During Landings, Takeoffs." Fox Business. N.p., n.d. Web. 1 May 2013..


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Modernizing the Fleet

For airlines, fuel efficiency and speed is the name of the game. Revenue is built on hedgingfuel costs versus number of paying passengers and is thus maximized if an airline canconserve fuel while serving more customers. In recent years, major manufacturers (namely

Airbus and Boeing) have been competing to roll out the future of fuel-efficient aircraft

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.Fuel prices make up a significant portion of Americans operating expenses and eat away atnet revenue. In fact, in 2012 35.2% of Americans operating expenses were the price of jetfuel. According to Bloomberg News, American is seeking to replace more than half the 190Boeing MD-80s in its fleet with more fuel-efficient 737s and Airbus A320s by 201710. TheMD-80, workhorse of the old American, went out of production in 1999 and the 737-800 isaround 25% more efficient10. American has ordered the most advanced new jets to date,including a recent order of 42 new 787 Dreamliner wide-body aircraft. This new, fuel-efficient airline will help to reduce costs as fuel prices skyrocket (See Figure 3).Modernization is not a new concept and has been around since the beginning of the airlineindustry. It has become more prevalent in recent years as airlines have attempted to cutcosts. Americans primary jet total sits at 608 (year end Dec. 31st) combined with 340 of US

Airways aircraft. This gives the new American the largest fleet in the world by over 200 jets.It also will give the new airline an edge in terms of fuel efficiency and seat capacity, making itextremely competitive against the likes of United (NYSE: UAL) and Southwest (NYSE:LUV).

Figure 32

Building the New American

On February 14, AMR Corporation and US Airways announced a long-awaited mergeragreement and vowed to work together to become the worlds dominant carrier11. Theagreement has been discussed in significant detail over the past year but only recently cameto fruition after long talks began. The new CEO of the airline will be Doug Parker, currentChairman of the Board and CEO of US Airways. The merger was met with significant

confidence from both the pilot and flight attendant unions at both airlines11. According tothe Wall Street Journal, the merged airline would become the worlds largest airline bytraffic and take a commanding position in eight of the busiest US airports11. The deal wasan all-stock one, valued at around $11 billion11. The Wall Street Journal predicts that the

10 "AMR, US Airways Affirm Plane Orders in Push to Refresh Fleet." Bloomberg. N.p., n.d. Web. 1 May 2013..11 "AMR, US Airways Predict Clear Skies." Wall Street Journal. N.p., n.d. Web..


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merger will start to contribute to earnings over the next year and will make a significant,positive impact on the bottom line11.

What is the New American? AMR is hailing this merger as a step in the process towardsre-enhancing the foothold American has on the industry. The merger is only a part of the

New American process

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. The combined airline will offer 6,700 daily flights to 336locations in 56 countries worldwide12. The airline will have the most competitive serviceacross the Eastern seaboard as well as an expanded shuttle service to support businesstravelers. The merged company will maintain all hubs held by both US Airways and AMR(Charlotte, Chicago, Dallas-Fort Worth, Los Angeles, Miami, New York, Philadelphia,Phoenix and Washington-DC). The loyalty program, already ranked as the #1 program inthe industry, will become even more enhanced with more potential benefits to customers12.Finally, customers will experience enhanced travel benefits through investments in newaircraft, modern technologies, and entertainment options aboard domestic flights. Thisprocess will happen over the next few years during the merger and will be a significant factorin profitability over the next year.

12 "The New American Is Arriving." US Airways-American Merger: International Benefits. N.p., n.d. Web. 1 May 2013..


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Quantitative Analysis

Trend Analysis

There are multiple ways to indicate stock growth over a period of time. The most importantindicator is to look at the price of stock growth relative to a benchmark (in this case theS&P500). This gives a better overall picture of not just company growth but also investorconfidence in a certain stock relative to the market as a whole13. AMR Corporation, over 52weeks, grew its stock price 687.3% compared to an S&P500 growth of 17.9%. While thisseems like a wild growth, one must remember where AMR is growing from. After filingChapter 11 over a year ago, the stock price plummeted to a low of $.03 per share and hasnow grown to over $4.33. This growth is demonstrated in Figure 4. The chart shows a clearpositive growth in the stock price relative to the S&P. After announcing the merger with USAirways, the stock picked up steam significantly and has been rising ever since. Morerecently, AMR announced higher than predicted Q1 earnings, which also provided a kick inthe stock price. As of close May 1st, AAMRQ stock was at $4.33 on a close up .46% fromthe previous day14.

Figure 4

Forward P/E Ratio

A forward looking price to earnings ratio uses forecasted earnings to calculate the price to

earnings ratio. Even though the earnings are just an estimate, they are a good indication offuture financial growth when low profitability currently exists13. Price to earnings indicatesthe valuation of a companys market value per share divided by the companys earnings pershare. The calculation for forward price to earnings is shown in Figure 5.

13 "Forward Price To Earnings - Forward P/E." Forward Price To Earnings (Forward P/E) Definition. N.p., n.d. Web. 1 May2013. .


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Figure 513

AMR Corporations forecasted forward looking price to earnings ratio is 1.4214. While aseemingly low P/E ratio, one has to look at it in comparison to previous quarterly earnings.Fiscal Year 2012 brought an actual P/E of 0, as there were no earnings per share due toChapter 11 proceedings14. Actual yearly revenue was up significantly from $17,947 to$18,743 (in millions) indicating a growth of around 104%. This was a similar increase fromFY 2010 to FY 2011. This consistent growth combined with consolidation leads to the firstever P/E in over 4 years. This is a positive trend indicative of positive analyst reports andconsolidated future growth.

PEG Ratio

A PEG ratio (Price to earnings to growth) is used to determine the stocks value while takingthe companys earnings growth into account13. A lower PEG ratio is indicative of an

undervalued stock given its expected earnings performance13. Combining this ratio with aforward-looking P/E ratio gives a good future indication of growth and the relative value ofa stock. The formula for PEG is given in Figure 6.

Figure 613

AMR Corporation has a 5-year expected PEG ratio of .5914. A PEG ratio below 1 is typically

indicative of an undervalued stock and AMRs balance sheet indicates the same. Withearnings growth being over 104% in the past three fiscal years and fiscal consolidationhappening due to Chapter 11, this ratio strongly demonstrates the potential future earningsper share of a stock in an extremely tough industry14. In reference to the previous forward-looking P/E ratio, this puts American at an undervalued potential penny growth stock.

Revenue Passenger Miles

While it is extremely important to look at balance sheet items for any corporation, it isessential to look at niche factors for an airline in particular. One critical factor that drivesrevenue growth is Revenue Passenger Miles (RPM). RPM is a transportation industry metric

that shows the number of miles traveled by paying passengers15. This makes up thebackbone of airline revenue growth and is an essential part of an investment report15. Themetric is computed by multiplying the number of paying passengers by distance traveled15.

14 "AMR Key Statistics." Bloomberg Stock Quotes. Bloomberg, n.d. Web.15 "Revenue Passenger Mile - RPM." Revenue Passenger Mile (RPM) Definition. N.p., n.d. Web. 1 May 2013.


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Figure 7 shows the load report and change in RPM for March 2013 in comparison to March2012. There is a consolidated growth of 1% driven by a 2.2% growth in regional RPM.International flights make up 4.4% of the consolidated growth while domestic makes a netdecrease of 1.3%. This positive growth is also indicative of a higher capacity fleet andincreased load factors. In fact, consolidated load factors (for the same month) were up .7%

from the previous year as well

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. Overall, this indicates a positive growth trend meaning theairline is making more money on more passengers.

Figure 716

16 "AMR Corporation Reports March 2013 Revenue And Traffic Results."AMR Corporation. N.p., n.d. Web..


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Recommendation

As demonstrated via both a qualitative and quantitative analysis of AMRCorporationscurrent stock price, it is the recommendation of this paper to purchase stock in AMR and torank it as a future outperformer. AMR has demonstrated future growth potential and

consolidation during current bankruptcy proceedings and is at a prime price to invest in.

Both the SWOT and PEST analysis indicate a stiff competitive marketplace for AmericanAirlines. All airlines face current stiff competition, as it is a tough industry to turn a profit in.That being said, both analyses demonstrate various potential opportunities that AMR isalready capitalizing on. First, AMR is working to modernize their fleet through thepurchasing of more fuel-efficient aircraft, which will help, negate the rising fuel costs andpolitical pressures associated with it. Second, AMR is in the midst of a merger with USAirways, which will provide financial stability to help steer the stock out of bankruptcy.Dubbed the New American, this airline will emerge as the front-runner of not just the

domestic US airline market but also the international one as a whole. It will contain thelargest fleet, most routes and highest load capacity of any airline in the industry. This highroom for growth provides endless opportunities for the airline moving forward.

As the airline emerges from bankruptcy a more learn, fuel-efficient airline, the financialfuture looks bright. The 52-week trend analysis indicates a large change in the stock pricefrom complete collapse to a stable $4 per share. Outperforming the S&P in a similartimeframe, AMR has posted a positive revenue growth over the past three years that has ledto its first P/E ratio in that timeframe. Combined with a low PEG ratio, it is the opinion ofthis paper that AMR is an undervalued penny growth stock. That being said, load factors andRevenue Passenger Miles are up significantly as well which, in the airline industry, are

indicators of solid capacity growth and future revenue. The company appears to be in solidfinancial shape considering its emergence from Chapter 11 proceedings and its merger withUS Airways. There is lots of room for growth in the next year.

At an extremely undervalued price of $4 per share, AMR is in a prime position to explode asa penny growth stock. While, on the surface, the firm appears to be barely making keepingits head above bankruptcy, there appears to be plenty of changes going on both financiallyand internally that will allow for growth. Investor confidence has risen (indicative of thegrowth in stock price) over the past year and $4 is cheap for a positive growth stock withvery little downside. This report discussed both qualitative and quantitative indicators of

positive health in AMR and it is our recommendation to purchase AMR at its current price.


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Executive Summary

Warren Buffett, long time venture capitalist and billionaire, once said, Indeed, if a farsightedcapitalist had been present at Kitty Hawk, he would have done his successors a huge favorby shooting Orville down.This statement, while true to the airline industry as a whole, does

not encompass the possibility of a good short-term position in an airline stock. A goodairline investment is grounded in both qualitative and quantitative analysis. Because of thevolatility in the travel industry, investing in an airline requires an in-depth analysis of factorsranging from load reports and revenue miles to fleet modernization along with the typicalfinancial statement analysis. Before addressing various qualitative analytics on AMRreorganization one must look at the bigger picture and the industry as a whole.

As demonstrated via both a qualitative and quantitative analysis of AMR Corporationscurrent stock price, it is the recommendation of this paper to purchase stock in AMR and torank it as a future outperformer. AMR has demonstrated future growth potential andconsolidation during current bankruptcy proceedings and is at a prime price to invest in.

This report will delve into various factors to demonstrate a positive, upwards trend inAMRs stock and to pitch AMR Corporation as a positive potential penny growth stock toinvestors.


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Works Cited

AMR Co., 2012 Annual Report, Feb. 20, 2013, from AMR Co. investor relations website,http://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhome, accessed April 29th, 2013

"AMR Corporation Reports March 2013 Revenue And Traffic Results."AMR Corporation. N.p., n.d. Web..

"AMR Files Bankruptcy-Exit Plan Based on US Airways Merger." Bloomberg. N.p., n.d. Web. 29 Apr. 2013

"AMR, US Airways Affirm Plane Orders in Push to Refresh Fleet." Bloomberg. N.p., n.d. Web. 1 May 2013..

"AMR, US Airways Predict Clear Skies." Wall Street Journal. N.p., n.d. Web..

"American Airlines AAdvantage Program Named Airline Program Of The Year At The 2013 Freddie Awards - SeekingAlpha."American Airlines AAdvantage Program Named Airline Program Of The Year At The 2013 Freddie Awards - Seeking Alpha.N.p., n.d. Web. 1 May 2013.

"American Airlines Pilots Get Nod to Use IPad During Landings, Takeoffs." Fox Business. N.p., n.d. Web. 1 May 2013..

"Best Warren Buffett Quotes | Editor's Desk at Equities.com." Best Warren Buffett Quotes | Editor's Desk at Equities.com. N.p.,n.d. Web. 29 Apr. 2013.

"Forward Price To Earnings - Forward P/E." Forward Price To Earnings (Forward P/E) Definition. N.p., n.d. Web. 1 May 2013..

"Legacy vs. Low-Cost Carriers: Spot the Difference." The Economist. The Economist Newspaper, n.d. Web. 1 May 2013.

Martn, Hugo. "10 Years after 9/11, the Airline Industry Is Looking up." Los Angeles Times. Los Angeles Times, 10 Sept.2011. Web. 29 Jan. 2013.

Naylor, Brian. "One Place You May Notice The Sequester: At The Airport."NPR. NPR, 21 Feb. 2013. Web. 1 May 2013."The Future Economics of the Airline Industry: A Changing Vernacular."Massachusetts Institute of Technology. MITInternational Center for Air Transportation, n.d. Web. .

"The New American Is Arriving." US Airways-American Merger: International Benefits. N.p., n.d. Web. 1 May 2013..
http://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhomehttp://phx.corporate-ir.net/phoenix.zhtml?c=117098&p=irol-irhome


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Appendix

The following statements are taken from the 2012 Annual Report for AMR Corporation2.


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