AMR investor urges board spin-off

FL Group, an Icelandic private equity firm that owns 8.25 percent of AMR, said in a letter to the board that changes at the company were long overdue, given the 50 percent drop in the share price since January.

"There is no time to lose, given the recent developments in the marketplace," FL Group Chief Executive Hannes Smarason said in a release.

The letter, disclosed on Thursday, was sent to the board on Tuesday, the day after AMR shares fell 12 percent after a disappointing revenue forecast stoked concerns of slowing demand, rising costs and weakening profits.

The stock rose more than 2 percent on Thursday.

Reykjavik-based FL Group, which owns Scandinavian discount airline Sterling Airlines and formerly owned Iceland's flagship carrier Icelandair, said it believed spinning off the AAdvantage frequent-flyer program could increase shareholder value by more than $4 billion.

AMR's market capitalization is about $5.4 billion.

Company officials weren't immediately available to comment.

Some industry experts said the move wouldn't address the cash-rich airline's high operating costs, which are its chief problem.

"I don't know why they're trying to get them to spin it off, because they already have so much cash its ridiculous," said CreditSights analyst Roger King. "It makes no sense to me."