By Kyle Peterson

CHICAGO (Reuters) - American Airlines doesn't need to take part in a big merger to stay competitive in an industry set to be transformed by consolidation, the chief executive its parent company said on Wednesday.

Speaking after AMR Corp (AMR.N: Quote, Profile, Research) reported a hefty quarterly loss due to skyrocketing fuel costs, Gerard Arpey said the No. 1 U.S. airline has not decided what its role in a consolidated industry might be, two days after Delta Air Lines (DAL.N: Quote, Profile, Research) announced its plan to buy rival Northwest Airlines (NWA.N: Quote, Profile, Research).

"We're fortunate to have a very strong network regardless of any consolidation that may or may not take place in the industry," Arpey said on a conference call with analysts.

"We may or may not participate in consolidation," Arpey added. He said, however, that the airline would be alert to opportunities to buy assets that could be sold during the merger of rivals.

AMR on Wednesday reported a first-quarter loss as the company grappled with the soaring fuel prices that have walloped the industry overall.

Those rising costs combined with a weak economy helped prompt the proposed Delta/Northwest deal on Monday and could spur a wave of further consolidation amid fears of falling travel demand.

AMR said it would cut capacity -- the number of seats for sale -- and accelerate its fleet renewal plan in hopes of boosting revenue and cost savings. Its shares rose as much as 10 percent after an 8 percent sell-off on Tuesday, but pared those gains later in the day.

"The first quarter proved yet again that fuel prices remain one the of the biggest threats to our industry and our company, and we also can't ignore the ongoing concerns about the U.S. economy and the potential impact on travel demand," said Arpey in a statement.