American Airlines parent AMR Corp. said Tuesday it will start with discontinuing some long-haul service, including Chicago flights to Honolulu and Buenos Aires in response to skyrocketing fuel prices and softening economy.

The Fort Worth, Texas-based company said the changes would significantly reduce costs and create a more sustainable supply-and-demand balance in the market.

The world's largest airline by passenger traffic said its initial changes will include:

- Discontinuing its Chicago-Buenos Aires service effective Sept. 3.

- Discontinuing its Chicago-Honolulu service Jan. 5, 2009. Between Sept. 3, 2008, and Jan. 5, 2009, American will operate Chicago-Honolulu service only on peak demand days.

- Discontinuing its Boston-San Diego service effective Sept. 3

- Restructuring American and American Eagle operations at San Juan, Puerto Rico beginning in September.

The actions come in the face of skyrocketing fuel prices and a softening economy, AMR said. The company also owns regional carrier American Eagle Airlines.

AMR said last week that jet-fuel prices have soared more than 10 percent since it announced its first-quarter results.

The company said it is also retiring 40 to 45 mainline aircraft, mostly MD-80s and Airbus A300s, as well as 35-40 regional jets. It said its American Eagle unit will retire its entire Saab fleet by the end of the year.

AMR's shares closed at $6.84, and were recently at $6.88 in after-hours trading.