Filed under: Products and services, Management, AMR Corp (AMR), UAL Corp (UAUA)

AMR Corp. (NYSE: AMR), parent of American Airlines, was urged by one of its top shareholders to consider “all options to enhance shareholder value” such as spinning-off American’s frequent flier program, according the ‘ DealBook blog.

In a letter to the Fort Worth-based company, FL Group of Iceland said “a conservative analysis” of AMR
shows “there is significant hidden shareholder value to be unlocked.” In particular, FL Group believes that unbundling AMR’s AAdvantage (”AAD”) Frequent Flier program could increase shareholder value “by more than $4 billion.”

The idea isn’t without precedent. As DealBook notes UAL Corp (NYSE: UAUA), the parent of United Airlines, are expected to consider spin-offs at its annual meeting this week and that Air Canada has already spun off its frequent flier plan. Shares of AMR, which have plunged 50% since January, are trading slightly higher today. But investors who have watched airlines destroy billions of dollars in shareholder value over the years shouldn’t get their hopes up.

Ceylon Securities analyst Ray Neidl told Bloomberg News that AMR sees “greater value in keeping all of the parts together.”

Maybe AMR will change its tune if other shareholders join forces with FL Group.

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