To: American Airlines Retirees

1 To: American Airlines Retirees From: Paul Mazzara, Chairman AMRRC Board Subject: American Airlines Retirees Committee Off To Rapid Start Within a week of electing its Board of Directors and conducting our first conference call meeting, the American Airlines Retirees Committee (AMRRC) is off to a rapid start. We have obtained the services of a San Francisco attorney, Dean Gloster, a partner in Farella Braun and Martel LLP, who has extensive experience with representing Retirees in corporate bankruptcy proceedings. He has worked with Retirees from Delta Air Lines, Chrysler, General Motors, Delphi and many other groups of Retirees from large corporations. He is already at work preparing the initial documents to file with the court presiding over the AMR bankruptcy. Bankruptcy attorneys work pro bono for Retirees until 1114 committees are established and the court requires the debtor in possession to pay them.

2 We have affiliated with the National retiree Legislative Network (NRLN) and are already drawing on its 10 years of experience in dealing with Congress and federal agencies. Three other AMRRC Board Members and I will participate in the NRLN's Annual Leadership Conference on Monday and Tuesday in Washington, A primary purpose of the NRLN's meeting is for retiree association leaders to meet with members of Congress, their staffs and federal agency officials to lobby for legislation to protect the financial security of Retirees . The NRLN has arranged for AMRRC leaders to meet with some of the top administrators of the Pension Benefits Guaranty Corporation (PBGC). The NRLN as given a list of our questions and concerns to the PBGC staff to allow them to prepare for our meeting on Monday afternoon. You may have seen the January 26 article in which the PBGC staff suggested that American Airlines is purposely downplaying the consequences of the possible cancellation of its pension plans, attempting to shift the responsibility to the PBGC.

3 J. Jioni Palmer, PBGC's Director of Communications, stated that American 's recent statements through its lead bankruptcy counsel, suggest that it is hoping to shift its retirement responsibilities to the PBGC. " American said nothing's been decided yet, but didn't even bother to pretend that it was trying to preserve its employees' pensions," Palmer said. American 's in-house and outside lawyers have been clear they want to take back our benefits. We will also have a meeting with the Staff Director of the Senate Judiciary Committee that has jurisdiction over corporate bankruptcy issues. We will use the NRLN's white papers on Bankruptcy and PBGC Reforms to identify to the Committee Staff Director the legislation and rule changes that need to be enacted to place Retirees ' pensions and benefits on a list of obligations that companies should be prevented from shedding in bankruptcy proceedings.

4 Since most members of Congress and their staffs welcome visits from their constituents, we will have meetings on Capitol Hill in the offices of our elected representatives to impress upon them that American Airlines Retirees need their support to protect our retirement security. Included among the retiree associations attending the NRLN's conference will be leaders of Delta Air Lines Pilots and Chrysler. We expect to learn a great deal from them about their experiences going through the bankruptcies of their companies. Also, leaders of the Kodak Retirees association will be in attendance and we will find a lot in common since Kodak filed for Chapter 11 bankruptcy this month. The EKRA Kodak Retirees organization has experienced significant membership growth during the past year and we want to hear about how the achieved their success. After I return from Washington, , I'll give you a report on our activities there.

5 If you have visited the American Airline Retirees Association website at , you are aware that the AMRRC Board is comprised of seven American Airlines Retirees with diverse careers in AA/TWA. Five board members were elected and two were selected to round out the Board Members' backgrounds representing union, non-union and management Retirees as well as experience with pensions, health and life insurance and bankruptcy liabilities. If you read on the website about our mission, you know that AMRRC is dedicated to preserving the retiree benefits that are now in jeopardy through American Airlines bankruptcy filing. If you have not yet been to our website I urge to access it very soon. Learn about our organization's objective to be a strong voice for all American Airlines Retirees . See the names of our Board Members and read our profiles. Most importantly, print out the membership form and send your membership dues so we can begin building the "war chest" to represent Retirees ' interests in the bankruptcy proceedings and have funds to communicate with you and recruit additional members.

6 I and the other AMRRC Board Members believe that while American Airlines has a number of different groups in different organizations whose pensions and benefits are under different plans, we all have a common goal of protecting our retirement security to the greatest extent possible. The AMRRC is willing to work with any retiree groups so we can make the best of the difficult situation we are facing. Paul Mazzara, Chairman of the Board American Airlines Retirees Committee AMRRC, INC, Airlines Retirement CommitteeP. O. Box 1178 Bedford, TX 76095 January 31 and February 1,2012 Honorable Senators, Members of the House of Representatives and Staffers,All over the United States Retirees in the public and private sector are losing promised benefits andwe believe this must be halted. We are in Washington as new members of the National RetireeLegislative Network (NRLN) to attend the Annual Leadership Conference as representatives ofAmerican Airlines Retirees .

7 Thank you for taking the time to consider our Corporation (AMR), the parent corporation of American Airlines (AA), entered Chapter 11 Bankruptcy on November 29,2011. Prior to that time, the management and employees of AA hadspent many years trying to avoid this outcome. Then CEO Gerard Arpey believed that bankruptcywas not an honorable choice. After the Board of Directors meeting that resulted in the bankruptcydecision, he retired rather than oversee this path. This retirement may seem like an unusual butinsignificant event in today's corporate behavior, but the history leading to his decision April 2003 AA experienced a "virtual" bankruptcy. Employees were challenged to identify andaccept concessions that would result in overall savings that AMR upper management had identifiedas necessary to avoid Chapter 11 and create a cost competitive work force.

8 Each employee groupaccepted pay cuts. In addition, all groups were required to slash benefit to 2003, all Non Pilot employees at AA were required to pay small monthly fees called 'Pre-Funding' which were put in a trust to guarantee retiree health coverage of $300,000 until age 65 then$50,000 after age 65 with Medicare as primary coverage. ln the 2003 concessionary bargaining,some of the groups opted out of the Pre-Funding program, received a refund of their payments, andagreed to pay monthly premiums after retirement for this coverage. Other employee groups, includingthe Transport Workers Union (TWU) and the Association of Professional Flight Attendants (APFA),took deeper wage cuts in order to continue Pre-Funding and the promise of premium free exchange for these concessions, AA management was to increase revenue and create a businessplan that allowed this now competitive workforce to work for a profitable company.

9 The unsecuredcreditors committee has informed the court that AMR failed to meet its part of the bargain and has notsuccessfully generated the revenue necessary to become now find themselves in an untenable position. Many workers retired prior to Medicare agewith confidence in the coverage that was promised. Because each group of employees crafted itsown health coverage, we went from 2003 fonruard with a number of different plans. AMR has alreadymade changes to promised benefits of non-union Retirees over 65; they no longer have any companysubsidized health 2005 and 2006, AA Management, non-management and representatives from the TWU, APFA andAllied Pilots Association (APA) visited Congress supporting the Pension Reform Act of 2006. ThenCEO Gerard Arpey was with us on the hill as we identified defined benefit pensions as deferredearnings accumulated over careers that had often spanned workers' entire adult life.

10 These werecontracts between the employer and employee. We asked the support of our elected representativesto do the right thing and allow the airline businesses time to make up shortfalls to pay guaranteedbenefits. We were elated when this legislation on a fixed income are not in a position to compensate for the unexpected expenses in healthcoverage or reductions to their promised fixed income. The correct path is one in which each personwho retired with promised health coverage and an accrued pension should not suffer due tomanagement failure to craft a profitable business the time of Chapter 11 filing, AMR had over 4 BILLION DOLLARS on hand. This was ample tomeet their current pension obligations but they chose to pay a reduced amount in January 2012. ThePension Benefit Guarantee Corporation (PBGC) and other members of the unsecured creditorscommittee have expressed outrage over this a recent tetter to employees AMR Senior Mce President, Human Resources Jeff Brundage, statedthat "for those whose pension benefit has vested, if the pension plans are terminated, more than 90%of participants would see no reduction in their pension benefit accrued as of November 29,2011".