Following the demise of A.C. Gilbert in 1966, long-time rival, Lionel, announced in May 1967 that they had purchased the American Flyer name and tooling. However, Lionel Corporation never manufactured American Flyer trains, due to the fact that within two years, that company was bankrupt itself.
In 1969, Lionel Corporation announced that it sold its train lines to General Mills, including the unused American Flyer tooling. In 1979, General Mills’ Lionel division started to reissue Flyer products under that name. In 1984, General Mills sold the Lionel Co. to Kenner, a toy manufacturer, who subsequently sold it one year later to Richard Kughn, a Detroit toy collector. For over a decade Kughn moved both the Lionel and American Flyer brands forward. The company continued making the trains with new paint schemes and started to modify some of the models’ features.
In 1996 Kughn sold majority interest to Wellspring Partners, LLD, a national turnaround firm. The new company they started is the current Lionel, LLC. Lionel/AF has introduced some totally new models with their own, modern control systems.
In more recent years a number of other companies began producing Flyer compatible equipment, including American Models, beginning in 1981 and S-Helper Service (now MTH) beginning in 1994.