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.

Haven't heard of FL Group? No, it's not from Florida. Actually, FL Group is a fund based in Iceland.

It's a fairly big fund apparent by this week's announcement it bought a 5.98% stake in AMR Corp. (NYSE:AMR), the parent company of American Airlines.

Despite a rally in AMR's stock in 2006, FL Group thinks there's much upside left. That is, with capacity shrinking, there should be a pick-up in pricing and profits.

In fact, other savvy investors, such as the Texas Pacific Group -- which recently was part of the buyout of Qantas -- think the same.

FL Group is far from a novice in the airline industry. The fund has made a variety of investments in European airlines. About a quarter of its assets are in airline issues.

As for AMR, FL Group thinks the airline is well-positioned for the uptrend because of its lucrative routes. Actually, the airline did something this year that is not very common with legacy carriers -- it posted a profit.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.