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AMR booted from S&P 500
Standard & Poor's says world's biggest airline to exit large-company index. REIT will replace it.
March 11, 2003: 8:08 PM EST

NEW YORK (CNN/Money) - AMR Corp., which runs American Airlines, is being removed from the Standard & Poor's 500 index Thursday because this year's 76 percent share-price tumble has all but disqualified it from the index of large market-value stocks.

Standard & Poor's Tuesday said AMR (AMR: Research, Estimates) is being removed because of low market capitalization and price per share. S&P plans by the close of trading Thursday to replace the airline with Apartment Investment & Management Co. (AIV: Research, Estimates), a real estate investment trust with a $3.3 billion market value.

Shares of AMR, which began 2003 at $6.60, fell 11 cents, or 7 percent, to $1.48 in after-hours trading Tuesday. The latest decline cut the company's market value to $230.9 million, the size of a small-capitalization stock.

The airline industry has lost billions of dollars as worries about war and terrorism deter travel. Higher fuel prices and expensive labor contracts have kept costs high.

US Airways and UAL Corp. (UAL: Research, Estimates), which runs United Airlines, are operating under bankruptcy protection. AMR, the world's biggest airline, is rumored to be close to seeking court protection from creditors.

The union representing flight attendants at American said Tuesday it was ready to take any necessary actions for an agreement that would help the carrier avoid bankruptcy, Reuters reported. The company, based in Fort Worth, Texas, lost $3.5 billion last year.

The removal of AMR will leave only two airlines in the widely followed S&P 500 index: Southwest Airlines (LUV: Research, Estimates) and Delta Air Lines (DAL: Research, Estimates).

Apartment & Investment Management, based in Denver, may rise in the days ahead. That's because fund managers whose portfolios must mirror the S&P 500 often buy recent additions.  Top of page

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