Here's what's good about American Airlines right now: It is the nation's only legacy carrier that has never declared bankruptcy, and chief executive Gerard Arpey seems to have almost religious objections to putting it and its parent company, AMR Corporation, into Chapter 11.

Here's what's bad about American Airlines right now: everything else, including Arpey's long-standing antipathy to bankruptcy.

The financial decline of American Airlines in recent years is already the stuff of legend. As this month's market gyrations have shown, American is a wreck. Here's how:

• At Tuesday morning's opening, AMR's share price of $2.53 was down about 75 percent from its 52-week high. Its market capitalization of around $850 million carries a debt load of $12 billion.
• Its cash flow is weak, its costs are high, and its market share is shrinking.
• It has union problems, is fighting a multisided battle with the third-party firms that distribute its tickets, and it announced another capacity cut on Monday.
• It lost $286 million in the second quarter, when most of its competitors were profitable. It will show another loss when it reports third-quarter numbers on Monday, it won't make money this year, and it isn't expected to make money next year. In fact, AMR hasn't turned a full-year profit since 2007.

American can't even put a positive spin on those dreadful facts because its top PR man, Roger Frizzell, quit last week. He took a job at PG&E, one of the nation's most controversial utilities.

But American Airlines is actually in worse shape than the numbers show. The carrier was once feared by competitors and respected by passengers. It had the best-trained, most-motivated employees in the business, and its top executives were considered the cream of the U.S. airline crop. It was universally regarded as the nation's best airline and its most creative competitor. It took its position as "industry leader" seriously, and where American led, other airlines and most business travelers followed.

None of that is true anymore. American has fallen so far so fast that some industry analysts speculate that AMR is a takeover target for US Airways, which for decades has been a punch line in an industry that has long been regarded as a bad joke.

"Even to mention [AMR] in the same sentence as US Airways is a nightmare," one former American Airlines executive told me the other day. "We used to get a lot of mileage out of being seen as the big bullies on the block. Now [American] is being pushed around by 97-pound weaklings. And don't think the weaklings aren't getting a lot of psychic satisfaction out of it."

It's impossible to chronicle all of American's glorious past or its recent failures, but consider just a few of the recent stumbles:

—Just as the "premium economy" movement was taking hold, American dropped its "More Room Throughout Coach" initiative in 2004. Now competitors such as United and Delta have premium-priced coach seats with extra legroom, and American is stuck with cramped and uncomfortable chairs and no upgrade path for its best and most profitable customers.

—It was the first U.S. carrier to announce its intention to put WiFi on its aircraft, but then was slow to implement the service. By contrast, Delta Air Lines has wired substantially all of its fleet, and niche carriers such as Virgin America are totally wired.

—American spent most of the post-deregulation era buying or building hubs in cities such as Nashville, Raleigh-Durham, San Jose, San Juan, and St. Louis, only to decide its future rested on key "global gateways." The problem with that? Now Dallas/Fort Worth-based American is in a Texas death-match struggle with competitors in places like New York, Chicago and Los Angeles. It must rely on its Oneworld partners for coverage in London (British Airways), Tokyo (Japan Airlines), Hong Kong (Cathay Pacific), and Sydney (Qantas).