AMR Corp. officials said they were looking for new ways to cut costs to compete with low-fare operators, and they lamented the continuing downturn in lucrative business travel.

American, however, will not be content to wait for an upturn in the economy, they said.

"We have to find a way to make money in the current environment, the way Southwest Airlines and JetBlue (Airways) make money in this environment," said chief financial officer Jeffrey Campbell. He said the discount carriers achieved greater productivity with their people and planes.

AMR said that its loss in the three months ended June 30 was $3.19 per share, compared with a loss of $507 million, or $3.29 per share, in the same period last year.

Excluding a charge for lost tax credits, the loss would have been $465 million, or $3 per share. On that basis, analysts surveyed by Thomson Financial/First Call had expected a loss of $3.04 per share.

Revenue was $4.48 billion, down 20 percent from the $5.58 billion of a year earlier and below the $4.61 billion expected by analysts.

Campbell said AMR could withstand such huge losses longer than some of its competitors, most of whom have also lost staggering sums since Sept. 11. He said AMR has $2.6 billion in cash and $6 billion in aircraft that could be mortgaged.

AMR chairman and chief executive Donald J. Carty said passenger traffic has "rebounded nicely since last fall," but average fares are at 15-year lows, sharply depressing profits.

The airline's revenue rose and its net loss narrowed for the third straight quarter. Net loss has decreased from $798 million in the fourth quarter of last year to $575 million in the first quarter and $495 million in the second.

"It's heading in the right direction," said Helane Becker, an analyst with Buckingham Research Group. "On a sequential basis, the (second-quarter) numbers didn't look bad. But the improvement isn't as fast as people would like."

Becker, who has a "neutral" rating on the company's stock, said the challenge for American and other major carriers is to improve profits by raising fares. Several recent efforts to raise prices have faltered amid resistance from one or more rivals.

Investors remained concerned about the slow pace of recovery at the major carriers. In trading Wednesday, shares in Fort Worth-based AMR fell 40 cents to $12.87, to a one-year low.

After the terrorist attacks of Sept. 11, in which two American jets were hijacked and crashed, the company cut the size of its fleet, delayed capital spending and laid off workers to deal with a drop-off in air travel.

The work force at AMR, which also owns TWA and the American Eagle commuter airline, has fallen from 128,000 to 112,000 in the past year. Carty has said the airline won't need as many employees in the future, but officials said no layoffs are planned.

American has been hurt more than most airlines by what CFO Campbell termed an "excruciatingly slow return" of business travelers. The airline has responded by reducing the frequency of flights on some popular business routes, such as Dallas-Chicago and San Francisco-New York, reassigning the planes to more leisurely routes to destinations in the Caribbean and Florida.

James Higgins, an analyst with Credit Suisse First Boston, praised the decision to reduce flights on business-traveler routes but expressed concern about American's estimate that it will increase capacity late this year by 10 percent to 12 percent over last year's moribund fourth quarter.

"The reason revenue is so weak is there's too much capacity," Higgins said. "The less the better, as far I'm concerned."

For the first six months of the year, Fort Worth-based AMR lost $1.07 billion, or $6.90 per share, compared to $550 million, or $3.58 per share in the first half of 2001. Revenue has fallen nearly 17 percent, to $8.62 billion from $10.34 billion.

The June quarter results included a $30 million after-tax charge because it expects to lose tax credits for taxes already paid to other countries where the airline operates. The loss of tax credits was a side effect of an accounting provision that Congress included in a post-Sept. 11 airline industry-bailout law.