As an investor, I really despise the airline sector at the moment. These companies are notorious for being poorly run cash-losing machines.

Now, in the midst of a deep recession and too many airplanes flying too few customers, airline stocks can be expected to be poor performers in the short run and maybe longer.

I made the sector part of my Top 10 Stocks to Avoid in 2009. The main thesis, aside from the obvious recessionary issues, was that oil prices would resume their climb at some point in 2009.

Specifically, I suggested investors avoid Delta Airlines (NYSE: DAL) and United Airlines (NASDAQ: UAUA).

Higher oil prices directly impact the bottom line of the air carriers. The higher oil goes, the more difficult it is for the airlines to make a profit. This summer, with oil prices hitting $150 per barrel, the future of the group was in peril.

That said, the reality of higher prices caused the group to make some necessary changes that included mergers, reduced capacity and important surcharges. The operating environment had the potential to bring much needed discipline to the carriers.

Unfortunately, higher fuel prices did not last long enough to bring enduring change to the group. As prices fell, airline stocks rallied. It was looking good until the economy tanked.

With the recession, oil prices suddenly mattered less. Instead, the focus was on the consumer and business traveler cutting expenses during a contraction.

The airline sector loses if the economy rallies, as such a state brings higher oil prices and lower profit. If the economy stalls, the sector loses customers and revenues fall to unsustainable levels.

The point is that it is no-win situation for the group.

These days in commercial aviation, airlines are finding ways to operate more efficiently amid the toughest sector conditions since the first oil shock in 1973-74.

And while there's no love lost between passengers and the major carriers' unconventional way of increasing total consumer flying costs by adding separate baggage fees, there's one a-la-carte fee the public may be willing to pay for: a fee for internet access on airplanes.

Delta Air Lines (NYSE: DAL) announced it will start offering broadband internet service on domestic flights as early as October, The Washington Post reported Wednesday. Other airlines, including Continental (NYSE: CAL), Southwest (NYSE: LUV), and Virgin America are planning or testing internet services. (Delta will merge with Northwest Airlines (NYSE: NWA), pending U.S. Justice Department approval.)

Analysts generally credit JetBlue (NASDAQ: JBLU) with raising coach class amenity standards for flights in the United States when it introduced satellite TV and other services on its flights.

Delta's service will cost a $9.95 flat fee for flights lasting three hours or less and $12.95 for flights longer than three hours.

Public seen receptive to Wi-Fi fee

Stock analyst and frequent flier C. Leonard Bauer says Internet fees would be "a lucrative revenue stream" for the airlines, and ironically one that will probably be popular with the public.

Delta Air Lines and Northwest Airlines may reach a merger agreement within weeks after sharing details of the plan with pilot unions, people close to the talks said, Bloomberg News reported Monday.

An announcement of the merger may come within weeks, Bloomberg News reported.

The merger would create the world's biggest airline in terms of traffic, Delta served about 74 million passengers in 2007; Northwest, about 56 million. The combined entity would vault past no. 1 carrier American Airlines (NYSE: AMR), which served 129.5 million passengers.

Delta's (NYSE: DAL) shares were down 23 cents to $19.95, while Northwest (NYSE: NWS) declined 23 cents to $20.62 in Monday afternoon trading.

Analyst C. Leonard Bauer told BloggingStocks Monday a Delta / Northwest represents a good operational fit, for several reasons.