Welcome Airfarewatchdog readers! Please come on in and take a look around. I post my usual snarkiness Monday through Friday with this post on what I’ve written over at BNET capping the week on Saturday.

For Cranky readers, head on over to the Airfarewatchdog Blog to see my first article for them, “Confessions of a fat fingered airline pricing analyst.” It’s been awhile since I last worked as an airline pricing analyst, but this was a fun look back on those days.

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Frontier Announces Small Operating Profit for January
As a bankrupt airline, Frontier has to report its results on a monthly basis. So the airline’s January financials can give us a peak into what’s to come.

Continental’s February RASM Down Dramatically
Continental released February traffic and revenue information this week and the news is far from good. Get ready for the pain.

Ontario’s Spiral of Doom Results in Less Traffic and Higher Fees
What happens when airlines pull back on flights? Costs go up. And that’s when an airport enters the spiral of doom.

US Airways Sees February Unit Revenue Declines
The US Airways February traffic report may not have shown much of a change in load factor, but revenue estimates were down significantly.

News and Notes From Delta’s 10-K
Delta release it’s annual report this week, so I thought I’d poke through it and see what I could find.

February Airline Traffic Numbers
The final February traffic numbers are out, and it’s downright ugly. Here’s the list.

Allegiant’s Strategy In Its Own Words
A peek inside Allegiant’s 10-K gives us a great explanation of the airline’s business model. If you didn’t know it before, here it is in their own words.

The rumors are flying that a plan to bring the Eastern Airlines name back is under way. This is easily one of the worst ideas I’ve seen in a long time. Bringing back a defunct airline’s name has rarely been a successful move for airlines in the past, and the fact that Eastern had a pretty awful reputation among customers makes this even worse. Why the heck would you want that baggage?

Quick, what do you think of when you think of Eastern? Chance are it’s not good. Maybe one of the airline’s high-profile accounts sticks out for you? The one that comes to mind for me is Eastern 401. That’s the one where the pilots plowed into the Everglades after getting distracted by a landing gear issue.

But even more likely is that you think of a bad airline with horrendous labor relations, poor service, and really, not much good at all. The story of Eastern’s disastrous labor relations are legendary. The standoffs between Charlie Bryan and the final two CEO’s of the airline, Frank Borman and then Frank Lorenzo, were full of animosity and eventually, failed brinkmanship. Though they all lost in the end, in the meantime, the passengers suffered terribly.

But don’t think this was just a decline at the end of the airline’s life. Eastern was never known for its stellar service. This was an airline that was often known for making bad decisions under its first true leader, Eddie Rickenbacker, and I imagine that very few, other than employees or those with rose-colored glasses, will have fond memories. (Yes, I’m sure I’ll hear about it in the comments.) So why the heck would someone want to resurrect this name?

Well, Ed Wegel, the man trying to bring Eastern back, says that the plan “leverages off of Eastern’s core strengths while using all of the lessons we have learned from all of the start up airlines and the restructuring of all of the legacy carriers over the past 18 years.” Hmm, I can’t really think of many core strengths of Eastern’s except for maybe cost control efforts. Rickenbacker was a known tightwad, so in that sense, he was ahead of his time. Maybe this will be a Skybus clone.

A look at much of Ed Wegel’s bio is like walking through a cemetery. True, he left most of these companies long before they failed, but it’s still a depressing list.

• CEO, SunTrips (hired 2005) – Shut down 2006
• President, BWIA (1994-1996) – Airline shut down and replaced with Caribbean Airlines in 2007
• SVP, Atlantic Coast Airlines (1991-1996) – Became Independence Air in 2004 and quickly failed
• AVP, Shearson Lehman (1987-1991) – Went bankrupt in 2008
• Manager, Pan American World Airways (1985-1988) – Shut down in 1991
• Manager, Eastern Airlines (1985-1987) – Shut down in 1991

It hasn’t been all gloom and doom. He did work with both Chautauqua and Mesa during the 1990s and they’re both still around (though with a four cent share price, the latter is treading on thin ice).

But let’s get back to the point. Eastern does not invoke the same fuzzy, happy memories that other airline names like Piedmont may bring. But I wouldn’t even bring back a name like Piedmont’s. All you’re doing is setting expectations for something that probably won’t be matched.

And do I even need to discuss the ridiculousness of starting an airline at all right now? I think not.

If you’d like to learn more about the nasty history of Eastern Airlines, there are plenty of books around. The latter years are covered very well in the industry bible, Hard Landing. But you don’t need a book to get a good idea. Even this short article in Time magazine will give you enough background to know that there is no point is bringing this airline back to life.

Time flies, doesn’t it? It seems like just yesterday that Alitalia was finally being privatized, but it’s actually been a few months. I thought it was time to check in on the airline to see how it’s doing. Anyone want to make any bets?

Of course, the airline isn’t doing well at all. It is projected to lose 200 million euros for 2009. That may sound like a big number for an airline that shrunk dramatically after its restructuring, but . . . uh, yeah that is a pretty big number. Granted, it’s far less than what the airline was going to lose in 2008, but really that’s a given. If they couldn’t improve on what the bungling government was doing, then there would have been no hope at all.

So are people flocking back to Alitalia now that it’s under new management? Hardly. The airline was crowing that it had bumped its load factor up to 59%. It had apparently been down around 43% so this is good news. I believe Alitalia will soon be launching its new ad campaign, “Fly Us and Get an Empty Middle Seat.” Catchy, no?

And the news doesn’t get much better. Remember that Lufthansa started up its own Lufthansa Italia subsidiary to fly between Italy and other EU markets? Well they’re heading for the Italian domestic market now as well. In April, Lufthansa will start flying from Milan to Bari, Naples, and most importantly, Rome, the crown jewel domestic market.

But at least labor relations are going well. The unions haven’t struck since, well, yesterday. Ok, maybe that’s not so good either. They had planned a 24 hour strike yesterday to protest their treatment by the new management team. I didn’t hear anything about whether or not that disrupted any flights or not, but maybe that’s just not considered news anymore.

Thanks for continuing to provide me with excellent blog fodder, Alitalia.

A piece in the Wall Street Journal yesterday noted that Spirit is planning to start charging a PUF, or Passenger Usage Fee, for anyone who doesn’t book their tickets at the airport ticket counter. Even though the author said it was coming in the future, it looks like they didn’t waste any time, because it’s already out there. The article makes it sound like this is a new invention, but Allegiant has been doing it for quite some time, as those who read the comments on this blog would already know. . . .

From the checks I did, it appears that this fee is $4.90 each way per person. So, for a family of four traveling roundtrip, this could be a nice chunk of change. The fee will be attached to any booking that’s not made at the airport ticket counter. This is the same scheme as the “convenience fee” that Allegiant tacks on to its tickets. It makes no sense from a cost reduction standpoint so it’s frustrating. But, it does make sense from a revenue standpoint – people aren’t going to go to the airport and wait in line for something like this. And that’s why this kind of fee will stick with carriers like this.

It’s my understanding that they couldn’t put this on every single itinerary. It’s actually not on flights to Colombia and Panama because it’s not allowed by the governments down there! But the rest of you will get stuck with it unless you head on in to an airport to buy.

It’s very interesting that the Journal article notes that Spirit had to come to terms with the feds on using the fee, because the first attempt to use it was considered deceptive. I haven’t heard that Allegiant has had any trouble with it, so I assume that they’re being more upfront about it than Spirit here. But the result is the same – another fee.

Those who know Spirit will not be surprised by this at all. It’s par for the course for an airline that wants to advertise extremely low fares and then pile on extra charges all around. It’s very much like Ryanair in that way, so just make sure that you understand how they operate when you decide to fly with them. Assume they’ll charge you for everything, and you won’t face any unexpected surprises.

My guess is that we’ll see even more of these types of fees if they can get away with it. Maybe they’ll start charging a fee to use a jet bridge to board? Or perhaps they’ll charge a fee for not being subject to a body cavity search at security. The opportunities are endless.

Remember when Southwest was fined for flying its planes past the time they were required to go through inspections? It appears that they’ve agreed to settle this thing with some pretty hefty penalties. From the looks of the punishment, you’d think Southwest has some serious systemic problems making the carrier unsafe, but don’t be so quick to judge. There could be some politics involved here.

The deal is this. Southwest gets the fine reduced from the originally proposed $10.2 million to $7.5 million to be paid in three easy installments. (Plus shipping & handling of $19.95) That’s actually not much of a reduction from the original amount, and they have a lot more work to do beyond that. The FAA’s announcement says Southwest has thirteen steps to take, but they only list five examples.

• Within 30 days, Southwest Airlines will increase the number of on-site technical representatives for heavy maintenance vendors from 27 to 35 people
• Within 60 days, Southwest Airlines will allow FAA inspectors improved access to information used for tracking maintenance and engineering activities
• Within 90 days, Southwest Airlines will designate a management head of Quality Assurance who does not have air carrier certification responsibilities
• Within 180 days, Southwest Airlines will review its Required Inspection Item (RII) procedures to ensure compliance with FAA rules related to maintenance and identify more clearly all RII items on its maintenance work instructions, engineering authorizations, and task cards
• Within 365 days, Southwest Airlines will rewrite all FAA-approved manuals

So they’re really just putting much more oversight into place here, and that’s not necessarily a bad thing. Certainly the first reaction many people will have is that Southwest was running an unsafe airline, but I wouldn’t worry. If they were truly unsafe, the FAA would have grounded the airline, or at least parts of it. But they didn’t. They’ve just required changes within the next year. So while Southwest probably can and should improve its safety program (as it’s doing), my guess is that politics is also playing a part here.

You’ll remember last year that the FAA was involved in a few embarrassing situations showing that their oversight maybe wasn’t as strong as it should have been. There was this incident, but there was also the larger and more disruptive MD-80 grounding that followed. So it’s in the FAA’s best interest to repair their image and make it look like they’re on top of things now.

Do I know that’s the case? No. But I imagine the blame should be shared here. I imagine everyone involved has some fault. Will Southwest be safer in the long run? Probably, and that’s a good thing. Don’t get me wrong. I’m not saying Southwest did everything right here. But I’m guessing the FAA came down harder on Southwest because of the circumstances than they would have otherwise.