PEOPLE - Frequent Floater?

American Airlines’ biggest investor has a plan for halting the tailspin in its share price, which is off 50 percent since the start of the year.

American Airlines’ biggest investor has a plan for halting the tailspin in its share price, which is off 50 percent since the start of the year. In late September, Hannes Smarason, chief of Icelandic investment fund FL Group, which owns 9.14 percent of AMR Corp., sent a public letter to the board urging it “to monetize value for shareholders” by floating the AAdvantage frequent flyer program. Smarason observes that Air Canada created $2 billion in additional value in 2006 by listing its Aeroplan frequent flyer unit, which is barely one tenth of the size of the 55 million-member AAdvantage program. American hasn’t responded to the letter and won’t comment on its plans. Smarason, busy trying to drum up support from other investors, is prepared for a proxy fight if necessary. “We have not ruled anything out when it comes to taking this to another level,” he says.

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