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                                                                   EXHIBIT 10.26


                                            January 19, 2001

Mr. Philip J. Purcell
Morgan Stanley Dean Witter & Co.
2500 Lake Cook Road
Riverwoods, IL 60015

Dear Mr. Purcell:

     This will confirm the following agreement relating to the deferral of your
director's fees in 2001.

     1. All director's fees and retainers ("Fees") payable to you in connection
with your service on the boards of directors (including committees of such
boards) of AMR Corporation and American Airlines, Inc. for the period January 1,
2001 through December 31, 2001, will be deferred and paid to you in accordance
with this letter agreement.

     2. Fees will be converted to Stock Equivalent Units in accordance with the
Directors' Stock Equivalent Purchase Plan, a copy of which is attached hereto as
Exhibit A (the "Plan").

     3. Within 30 days of the date when you cease to be a Director of AMR
Corporation, the Stock Equivalent Units accrued pursuant to the Plan will be
converted to cash and paid to you by multiplying the number of such Stock
Equivalent Units by the arithmetic mean of the high and the low of AMR stock
("fair market value") during the month when you ceased to be a Director of AMR
Corporation.

     4. AMR's obligation to make the payment pursuant to paragraph 3 hereof will
not be released or modified by reason of your death. In such event, the number
of Stock Equivalent Units as of your date of death will be multiplied by the
fair market value of AMR stock during the calendar month immediately preceding
your death, and the amount paid to Anne Purcell.


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     If the foregoing is satisfactory to you, please indicate by signing one of
the originals (two are enclosed) and returning it to me.

                                       Very truly yours,




                                       Charles D. MarLett
                                       Corporate Secretary


Accepted and agreed:



Philip J. Purcell


Date






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