You might think that I’d be sad to see Alitalia accept the Air France/KLM takeover bid but you couldn’t be more wrong. The fun is really just beginning.

When I was in school, I remember the guys from TPG coming in to talk about takeovers. They said there was no company too awful to take over. Even the worst companies could be attractive, as long as the price was right. I’m pretty sure Air France/KLM followed that school of thought when they made their bid for Alitalia.

AF/KL offered 1 share for every 160 outstanding shares of Alitalia. That values each share at about 10 euro cents, an 81% discount over the closing price on Friday and still two and a half times its closing price today. Over the weekend, the Alitalia management team voted to support the bid, so why is it still valued above that level? Because somebody must think this deal may not happen as is.

I wouldn’t be so sure that we’ll see much movement. AF/KL was pretty clear here. That’s what they’ll pay, but they’ll still only do it if the government, unions and EU all back the bid. Everyone who thinks that’s going to happen, raise your right hand. Now, raise your left hand and slap yourself in the face. Getting everyone behind this bid is going to be virtually impossible.

The infrastructure minister of Italy aid, “This is a proposal aimed only at creating profit for the bidder, that is harmful for the company, for the workers and for the country.” Despite those feelings, the government did come out in support of the bid on Monday. But that’s the easy part. Let’s see if they can get the backing of whatever government wins the upcoming elections along with some important local politicians (Milan’s government, for example).

But before that happens, it’s time to convince the unions to play nice. Will it happen? What does this picture of some union members tell you?

The unions were apparently so up in arms over possible job cuts that the members were even throwing eggs right before the arrival of AF/KL’s chief exec. Like I said, the fun is really just beginning.

[Photo Credit: Dario Pignatelli/Reuters]

I’ve always thought that older flight attendants on legacy carriers often wear way too much makeup but this is ridiculous . . .

As you may have guessed, this was no ordinary flight. This was Air New Zealand’s Pink flight taking passengers down from San Francisco to Sydney’s Mardi Gras. My friend Paul was onboard last month and this is just one of the many, um, interesting pictures that he took. If you’d like to see more, head here.

I know we have some pretty progressive gay-friendly airlines here in the US (eg American), but could you imagine them having a special flight with Kathy Griffin and several shirtless men taking people to the San Francisco Pride parade? I don’t think we’re quite there yet, but give it a couple of years.

Late last week, a friend of mine asked me why airfares were so expensive. Of course, I asked her where she was trying to go. She said she wanted to head up to San Francisco at the last minute, and the fare was a horribly high $200. $200?!?! I’d say that’s more than fair for a last minute trip up north.

For some reason, people hold on to the notion that air travel should always be insanely cheap. It should be $200 roundtrip to fly coast to coast every time. How absurd that they would have the audacity to raise fares?! Here is my public service announcement. (Cue “The More You Know” Theme Music, old image copyright of NBC)

Fares HAVE to go up. Stop complaining and pay up.

I know, I could have at least added some cherry flavor to that medicine, but I find it has more impact this way. Oil is now above $110 a barrel. For most airlines, this is the number one cost, above labor.

And for all those airline employees who have suffered through wage cuts, that is barely making a dent in the overall cost structure. I’ll let Jamie Baker of JPMorgan (via PlaneBuzz) explain it for you.

It’s Just Math. Industry fuel likely to be some $25 billion higher than 2002, overwhelming the $7 billion in labor savings wrought by the Ch.11 cycle.

Fares have to continue to rise. More than one airline CEO has said that with the prospect of high fuel prices continuing, they’re going to be looking at big changes. That probably means fewer flights because they just can’t make money at these cost levels.

So, next time your ticket is priced higher than you expected, don’t complain. Just realize that it’s the way it has to be.

I know, I know. I’ve been writing about US Airways way too much lately. I can’t help it if there’s a lot to talk about.

I’ve seen a flurry of discussion in the last couple weeks about whether or not US Airways has done away with their $5 booking fee. The short version of the backstory (long one is here) is that US Airways added $5 to cost of most itineraries if booked on their website or through their call centers. Since most online travel agents charge a booking fee of their own, the net price when booked at usairways.com or an online travel agent was about the same. Of course, you could always go to Priceline and save $5 since they have no booking fee.

I received a handful of emails in the last week asking if that additional $5 has now disappeared. I checked my usual route, Long Beach to Phoenix, and sure enough it’s not there anymore. Hooray, right? Not so fast.

I spoke with the PR team and was told “We’ve relaxed it for now, although you might still find it on some US domestic and to-from Canada ticketing transactions.” Uh oh, so now it’s a game of hide-and-go-seek.

It may be there, it may not, but they certainly won’t tell you. At least we know it’s relaxed. Maybe that means it’s only on flights to the tropical islands of the Caribbean and Hawai’i. How do you go about figuring this one out?

It’s tough to say. Your best bet is probably to stick with Priceline where they don’t charge you a fee on any itinerary. Otherwise, just compare usairways.com rates to your favorite online travel agent or metasearch site. If usairways.com is within a couple of dollars of that site, then the fee is in place. If it’s a bigger spread, like $5 to $10, then it’s not.

Remember when ATA was considered a “major” carrier with over $1b in annual revenue? It seems like so long ago now. They had a nice operation at Chicago/Midway and they had Indianapolis, Hawai’i, etc. Now, they’ve got just about nothing after announcing that they’re completely shutting down the remains of their Midway operation.

It was only about 4 years ago or so that airlines started fighting over who would bring ATA out of bankruptcy. America West was interested in establishing a Chicago hub as was AirTran. But in the end Southwest won the race to help the airline out. They took just about everything ATA had and made the airline a puppet for entering congested airports, serving overwater destinations, and serving the international world. A codeshare was set up, and everything seemed to be ok.

They’ve been shrinking ever since. There were a handful of routes started up to try to feed Southwest. Routes like Houston/Hobby to New York/La Guardia failed miserably and disappeared. Denver came online, but when Southwest entered the market, ATA walked away. Late last year, ATA announced it would be pulling out of Washington/National and New York/La Guardia altogether. Apparently the Southwest name wasn’t enough to make the flights pan out.

But there was still hope for the airline to become the international feeder for Southwest. They had a nice and easy customs and border patrol facility at Midway that served places like Guadalajara. As of June 7, all of that will end as well.

What’s left? Almost nothing. They still have their 80 flights to Hawai’i per week:

Las Vegas – Honolulu (daily)
Los Angeles – Honolulu (twice daily)
Los Angeles – Maui (daily)

Oakland – Hilo (6 times a week)
Oakland – Honolulu (twice daily)
Oakland – Lihue (4 times a week)
Oakland – Maui (twice daily)

Phoenix – Honolulu (daily)
Phoenix – Maui (daily)

And that’s all that feeds Southwest. Presumably the problem of a 5 hour overwater flight is not something Southwest wants to tackle on its own yet, at least not with the aircraft they have, but you have to assume it’s coming eventually.

ATA is starting to do some Latin flying from Miami to Guatemala City and San Jose, Costa Rica (both daily), but that looks to be run in conjunction with USALatinSky, so it’s not really their own scheduled service (I think).

And that’s it. The rest of the airline has gone back to its charter routes, and that’s probably where all the focus will be in the future. You’ll still see ATA airplanes around, but it probably won’t be a on scheduled basis for the most part. I wouldn’t be surprised to see Hawai’i go away at some point as well, especially as fuel prices start to climb and charter flights look better and better on the bottom line.