American Airlines Inc. will park its entire fleet of Airbus A300 jets by the end of 2009, and the Fort Worth-based carrier may need to slash even more capacity next year, executives said Wednesday.

The Airbus announcement came as American's parent, AMR Corp., posted a $1.4 billion net loss, swollen by a big charge on aircraft values.

Excluding special items, AMR lost $284 million, a sharp turnaround from its $317 million in net income in second quarter 2007.

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Two dozen Saab turboprop airplanes sit in storage at Abilene’s airport. American Eagle, the regional airline of AMR Corp., has grounded its fleet of Saab 340B aircraft in response to soaring fuel prices that have made many of the 34-seat Saab’s flights unprofitable.

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The company said it spent $2.42 billion for jet fuel last quarter, up 47.4 percent and $779 million from the same period in 2007.

"The increase in fuel prices has been nothing short of breathtaking," AMR chief financial officer Tom Horton told industry analysts on a conference call.

AMR also said that it would indefinitely delay the sale or spinoff of its American Eagle unit and that it raised $720 million by mortgaging airplanes or selling airplanes and leasing them back from the buyer.

AMR chairman and chief executive Gerard Arpey said, "We believe the airline industry cannot continue, in its current form, at today's record fuel prices," but he said the carrier was better prepared for the challenges.

"We remain committed to taking action – whether that relates to capacity reductions, revenue enhancements, fleet changes or other efforts to improve our financial foundation – as we work to secure our long-term future," he said.

The 34 Airbus jets, which mainly fly out of New York and Miami, offer many flights to the Caribbean and Central and South America.

American plans to remove 10 of the jets this year and the remaining 24 next year.

Mr. Horton and Mr. Arpey said the company hasn't decided how much capacity it will remove from American's schedule in 2009.

Some of the Airbus flying can be picked up by new Boeing 737-800s to be delivered in 2009, they said.

"We'll be moving airplanes around to backfill where we need wide-bodies," Mr. Arpey said.

"That's where those airplanes operate today. That doesn't mean necessarily that we're pulling down capacity in Miami, for example."

Including $1.16 billion in special charges, AMR lost $1.45 billion, or $5.77 a share, on revenue of $6.l8 billion.

The company recorded a $1.l billion noncash accounting charge to write down the value of assets, primarily aircraft, and a $55 million charge for severance-related costs.

Excluding the charges, AMR lost $1.13 a share, better than analysts' consensus of a $1.40 loss.

AMR shares gained $1.41, or 32 percent, to $5.82, the biggest one-day increase since April 2003.

AMR said that it still believes divesting American Eagle is a good idea but that it would delay any deal "until industry conditions are more stable."

AMR, which already announced plans to retire many airplanes this year, offered details on which airplanes would be grounded by Dec. 31: 30 McDonnell Douglas MD-80s, 10 Airbus A300s, 26 Saab 340 turbo-prop airplanes and 37 Embraer regional jets. The Saabs and Embraers are flown by American Eagle.

American has said it intends to reduce its fourth-quarter capacity 11 percent to 12 percent on domestic routes and 7 percent to 8 percent overall.

On Wednesday it estimated that its flying capacity will be down 3.4 percent on American for all of 2008, including a 5.7 percent decline on domestic routes.

Including American Eagle, system capacity will be down 3.7 percent compared with 2007.