American Airlines 1997 Annual Report Download - page 37

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Information Technology Solutions The SABRE Group is
a leading provider of solutions to the travel and trans-
portation industry. The SABRE Group employs its airline
technology expertise to offer technology solutions to
other industries that face similar complex operations
issues, including the airport, railroad, logistics and hospi-
tality industries. The solutions offered by The SABRE
Group include software development and product sales,
transactions processing and consulting, as well as com-
prehensive information technology outsourcing, which
bundles traditional data center, network and distributed
systems management with industry-specific software
applications and custom development. In addition, pur-
suant to information technology services agreements, The
SABRE Group provides substantially all of the data pro-
cessing, network and distributed systems needs of Amer-
ican and AMR’s other subsidiaries, Canadian Airlines
International Limited and other customers. In 1997,
approximately 32.7 percent of The SABRE Group’s rev-
enue was generated by the provision of information tech-
nology solutions.
In January 1998, The SABRE Group completed the exe-
cution of a 25 year, multi-billion dollar technology agree-
ment with US Airways, Inc. to provide substantially all of
US Airways’ information technology services. The agree-
ment covers the management and operation of US Air-
ways’ systems and information technology services,
including the migration or conversion of US Airways’ lega-
cy systems to The SABRE Group systems by mid-1999.
Management Services Group
The Management Services Group consists of four direct
or indirect subsidiaries of AMR — AMR Global Services
Corporation, Americas Ground Services, Inc. (AGS),
AMR Investment Services, Inc. and Airline Management
Services, Inc. (AMS).
AMR Global Services Corporation manages five operat-
ing units: AMR Services (formerly known as AMR Airline
Services), AMR Combs, AMR Global Logistics, TeleSer-
vice Resources (TSR) and the AMR Training Group. AMR
Services provides a full range of aviation services, includ-
ing ramp, passenger and cargo handling services, as well
as aircraft and equipment maintenance, fueling, general
sales representation, flight dispatch and management ser-
vices for more than 200 airlines and airport authorities at
approximately 65 locations throughout North America,
Europe and Asia. AMR Combs, the executive aviation
services division of AMR Global Services, is a premier cor-
porate aviation services network of 14 facilities in major
business centers in the United States, Mexico and Asia.
AMR Global Logistics serves the logistics marketplace and
specializes in logistics management, contract warehous-
ing, trucking and multi-modal freight forwarding ser-
vices. TSR provides comprehensive call center manage-
ment services including inbound and outbound telemar-
keting, as well as reservation services for certain air carri-
ers and a wide range of non-airline Fortune 500 clients.
The AMR Training Group operates the American Airlines
Training & Conference Center and provides a wide vari-
ety of training services to American and a number of
other corporate clients.
AGS provides airline ground and cabin service handling
at 10 locations in seven countries in the Caribbean and
Central and South America.
AMR Investment Services, Inc. serves as an investment
advisor to AMR and other institutional investors. It also
manages the American AAdvantage Funds, which have
both institutional shareholders — including pension
funds, financial advisors, corporations and banks —
and individual shareholders. As of December 31, 1997,
AMR Investment Services was responsible for manage-
ment of approximately $18.4 billion in assets, including
direct management of approximately $6 billion in short-
term investments.
AMS was formed in 1994 to manage the Company’s ser-
vice contracts with other airlines such as the agreement to
provide a variety of management, technical and adminis-
trative services to Canadian Airlines International Limited
which the Company signed in 1994.
RESULTS OF OPERATIONS
Summary AMR’s net earnings in 1997 were $985 million,
or $11.05 per common share ($10.78 diluted). The
Company’s results were adversely affected by a brief
strike and the strike threat from members of the Allied
35
AMR CORPORATION