AMR Pondering Investment Arm Sale

October 29, 2002 ( - AMR Corp., parent company to American Airlines, revealed it is considering selling its investment company as the ailing air carrier tries to bolster its bottom line.

AMR, which lost close to $1 billion in the third quarter of this year, enlisted brokerage Salomon Smith Barney to perform a valuation analysis on AMR Investment Services, spokesman Al Becker told Reuters.

Industry sources said the unit could fetch about $140 million to $190 million if it were sold, the Reuters report said.

Becker told Reuters that AMR Investment Services has been a successful business, but it is not a core component of the operations of the world’s largest carrier.

The possible sale is just one of many steps undertaken by the company to revitalize its finances, which were devastated by the effects of the Sept. 11 attacks on air travel.

AMR Investment Services is a wholly owned company that manages about $27 billion in assets. It was formed in 1987 with about $4 billion in assets from employees’ retirement funds and AMR cash holdings. About half of its assets now come from outside AMR.

AMR has lost more than $2.5 billion, excluding special items, since the attacks last year as the airline industry remains mired in a historic slump driven by decreased demand for air travel, Reuters said.