AMR, the parent of the largest US carrier American Airlines, has announced cost reductions that should produce $2bn (�1.28bn) savings per year.

Among the measures to be taken, American Airlines' domestic schedule will be cut by one sixth, AMR chairman Donald Carty said.

The airline will also add international flights, which should prove more profitable, so the number of flights will not change.

And it will not buy any new aircraft for a while, Mr Carty said.

"This is not business as usual at American," he said.

"We are not just engaged, we are energized by the challenge."

Technology reliance

American Airlines will refocus away from dot.com millionaires flying in and out of San Jose, California towards holiday makers going to Mexico.

More efficient self-service check in machines, which will print out boarding passes and let customers drop off their bags, will be introduced.

The airline will tighten its ticketing rules ,and it will encourage people to buy tickets via its website.

Free food will no longer be widely available on flights and several in-flight services will disappear.

These changes should make up for about half of AMR's targeted cost savings of $4bn per year.

Further cuts should come from a freeze in labour costs.

Government action

Beyond taking actions itself, Mr Carty called on the government to help.

Ticket taxes should be cut, he insisted.

And he called on Congress to aid airlines in their search for cheaper war insurance.

AMR shares closed up 30% on Wednesday at $7.61.