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An American Airlines jet taxis at at Dallas/Fort Worth International Airport on Tuesday in Dallas. - AP

For American, a blemish on a distinguished history

American Airlines used to bill itself as "something special in the air," and it was.

It was the first airline to offer curbside check-in. The first with computerized reservations. It invented the frequent-flier program and came up with the deeply discounted Super Saver fare to fill empty seats on its planes.

But it was disastrously behind on one thing — recognizing that its finances were unsustainable.

In the past decade, other airlines cut expenses in bankruptcy reorganizations. American plodded along with high labor costs and aging, gas-guzzling jets. Other airlines found merger partners. American was the awkward kid at the middle school dance.

American was left with little spare cash to make improvements or take risks. The money ran out, and on Tuesday, the time did, too. American and its parent company, AMR Corp., filed for Chapter 11 bankruptcy reorganization.

"They were the most innovative airline for years. Nobody could touch them," says George Hobica, who runs Airfare Watchdog, a site that alerts fliers to discount fares. "They're a shadow of their former self."

Some of American's 78,000 workers will almost certainly lose their jobs or have their pay or pensions cut. Its creditors will lose money. And its stockholders will be wiped out. The stock, which traded above $40 in 2007, closed Tuesday at 33 cents.

The bankruptcy filing is a black mark for American, which traces its routes to carrying mail for the government in the 1920s and was, in the decades between, a pioneer in the nation's skies.

"American Airlines is a link to the way travel used to be," says Edward Pizzarello, 37, an executive with a private equity firm who has more than 500,000 lifetime miles with the airline.

In 1936, American was the first airline to fly the Douglas DC-3, the first plane designed to carry enough passengers — it seated 21 — to be profitable without making money from mail or cargo.

Mail was no longer the priority. Passengers were. In 1942, American started a catering business, Sky Chefs, to provide meals to its customers.

After World War II, Pan Am and TWA dominated international routes, while American and United focused on the domestic skies. In 1948, American rolled out coach seats and family fare plans to make flying economical.

Nine years later came the American Airlines Stewardess College, the world's first school dedicated to flight attendant training. Two years later, American became the first airline to offer nonstop, coast-to-coast jet service with the Boeing 707. Flying time: Five hours, about the same as today.

But it wasn't until the 1970s that American — and its iconic silver jets — really started to shine.

American introduced routes to the Caribbean and expanded its sophisticated computer reservation system to travel agents. The system, known as Sabre, later became the guts for Travelocity and remains in wide use. Today, 300 million passengers a year use it to browse itineraries and make air, hotel and car reservations.

Passengers in the '70s were lured by ads promoting "the luxury fleet" and promising them "the best of everything." They also got cheap fares. Super Saver fares made American the first to figure out how to fill empty seats. They also led to the divide between business fares and cheaper, book-in-advance leisure fares that exists to this day.

In 1978, the government deregulated the airline industry, leaving the airlines to set their own routes and prices. American's leaders knew what it would mean for business.

American responded by developing the cost-efficient hub-and-spoke system we know today. Millions of passengers were suddenly changing planes in Dallas or Chicago to get to their destination.

To reward loyalty and keep customers from straying to new competitors such as Southwest, American launched the AAdvantage program in 1981 — the industry's first mileage rewards.

"There was a culture of perfection, high-quality standards and innovation," says Thomas J. Kiernan, who spent 33 years at American before leaving in 2000 as senior vice president for human relations. "That's what American excelled at."

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