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EK Wants More Flights To Germany, Govt Fear For LH  
User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Posted (7 years 3 months 3 weeks 6 days 1 hour ago) and read 9852 times:

Seems that EK wants to start Stuttgart and Berlin but the German Government are afraid for Lufthansa!

http://www.gulfnews.com/business/Aviation/10142857.html

Emirates seems to have struck another nerve with Lufthansa... let's see what the negotiations lead to

But I don't think EK will be willing to drop a daily in order to start a new destination in Germany... would they?

53 replies: All unread, showing first 25:
 
User currently offlineIkramerica From United States of America, joined May 2005, 21562 posts, RR: 59
Reply 1, posted (7 years 3 months 3 weeks 6 days 1 hour ago) and read 9762 times:

Emirates is trying to take over Europe and Australian markets, and after a while, I can see the EU governments balking. The EU has privatized all their carriers, but the middle east has pseudo state airlines with unlimited funds creating a destructive environment. It's not the free market at work here...


Of all the things to worry about... the Wookie has no pants.
User currently offlineHUYfan From United Kingdom, joined Oct 2001, 1413 posts, RR: 3
Reply 2, posted (7 years 3 months 3 weeks 6 days 1 hour ago) and read 9749 times:

What a load of rubbish, the story is the same all over Europe, national carriers largely ignore regional long-haul markets, Emirates is daring and succeeding where these incumbents are not interested. The likes of Emirates, Etihad and Qatar should be praised for making travel from the European regions much easier!

Regards

Mike


User currently offlineKevin777 From Denmark, joined Sep 2006, 1165 posts, RR: 1
Reply 3, posted (7 years 3 months 3 weeks 6 days 1 hour ago) and read 9742 times:

Interesting.. didn't know EK was already at 49 weekly to Germany, amazing..!

This is just competition coming in, and in a normal matter I'd say let the market decide themselves, and if LH are good enough then consumer's will still buy LH and they'll survive - but no reason pretending it's a level playing field, so I understand the German Government's hesitation to give additional rights.

Would EK give up frequencies for more on the route map? Well, I'd sort-of say they would, at least for either Stuttgart or Berlin - however, politically, I don't think so - doing so would just be accepting the current rights, and the German Government would win. By not doing so, keeping the higher frequencies and not starting another city, the German Government still wouldn't have won - and EK might even apply pressure from "within" by doing so; what city wouldn't want another carrier at their airport (look at how Berlin Airportsa are advertising in airline magazines). "Big old West-German Lufthansa from FRA is keeping the people of Berlin away from low air fares".. I can see the newspaper headlines...

Let's see..

Kevin777  Smile



"I was waiting for you at DFW, but you must have been in LUV" CPH-HAM-CPH CR9
User currently offlineKevin777 From Denmark, joined Sep 2006, 1165 posts, RR: 1
Reply 4, posted (7 years 3 months 3 weeks 6 days 1 hour ago) and read 9733 times:

Quoting Ikramerica (Reply 1):
Emirates is trying to take over Europe and Australian markets, and after a while, I can see the EU governments balking. The EU has privatized all their carriers, but the middle east has pseudo state airlines with unlimited funds creating a destructive environment. It's not the free market at work here...

Spot-on - I'm indeed pro-competition in a free market-level playing field, but this is anything but..

Kevin777



"I was waiting for you at DFW, but you must have been in LUV" CPH-HAM-CPH CR9
User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 5, posted (7 years 3 months 3 weeks 6 days 1 hour ago) and read 9723 times:

I suspect this will some how get tied into the politics of ordering planes from Airbus.

Anyway the expansion of the ME airlines should threaten European carriers particularly on routes from large cities that aren't major hubs and don't have many long haul international connections. The European carriers should be able to defend themselves on O&D routes from their hubs.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineIkramerica From United States of America, joined May 2005, 21562 posts, RR: 59
Reply 6, posted (7 years 3 months 3 weeks 6 days ago) and read 9686 times:

Quoting Kevin777 (Reply 4):
Spot-on - I'm indeed pro-competition in a free market-level playing field, but this is anything but..

Finally someone who sees what's really going on. There's even more to it, to do with geopolitics and the rise of the "market face" of Islam, but that's for another thread.

Quoting Atmx2000 (Reply 5):
Anyway the expansion of the ME airlines should threaten European carriers particularly on routes from large cities that aren't major hubs and don't have many long haul international connections. The European carriers should be able to defend themselves on O&D routes from their hubs.

This is a failure of the EU airlines, no doubt. And I'd like to see some truly free market based airlines come in and show them a thing or two.

I think EU carriers could learn something from an Airline like AA, who has major hubs, but also connects important domestic cities directly with important international cities even if they aren't hubs. LH is starting to do this, but they need to do more of it.



Of all the things to worry about... the Wookie has no pants.
User currently offlineKevin777 From Denmark, joined Sep 2006, 1165 posts, RR: 1
Reply 7, posted (7 years 3 months 3 weeks 6 days ago) and read 9651 times:

Quoting Atmx2000 (Reply 5):
Anyway the expansion of the ME airlines should threaten European carriers particularly on routes from large cities that aren't major hubs and don't have many long haul international connections. The European carriers should be able to defend themselves on O&D routes from their hubs.

You're absolutely right - this is a wake-up call for EU airlines. Also, EK is in a - very fair by the way - position to take good advantage of cities such as Berlin, Newcastle etc., with volume but hardly any intercon. Just like FI picks up niches like, say, MSP-CPH, that could never sustain nonstop, yet when you have to have a stopover, KEF is probably the best option. All fine and fair. Yet what I object to is, say, EK flying 8x daily from London to DXB, and what, 5 times or so daily to SYD/MEL - in that market, where p-t-p traffic indeed can sustain a service, you should have a level playing field between the players, not the case here.

Actually, I don't at all oppose EK flying TXL-DXB - that's indeed fair competition to LH; if you can't give it to the Berliners, EK will. But EK offering a tonne of capacity between, say, Frankfurt and Delhi, or Munich and Bangkok, no, that's not fair competition.

Kevin777  Smile



"I was waiting for you at DFW, but you must have been in LUV" CPH-HAM-CPH CR9
User currently offlinePatroni From Luxembourg, joined Aug 1999, 1403 posts, RR: 14
Reply 8, posted (7 years 3 months 3 weeks 6 days ago) and read 9642 times:

Quoting Ikramerica (Reply 6):
I think EU carriers could learn something from an Airline like AA, who has major hubs, but also connects important domestic cities directly with important international cities even if they aren't hubs. LH is starting to do this, but they need to do more of it.

This might also have to do with the fact that the individual European countries are significantly smaller than the USA? Frankfurt and Stuttgart are for example only 70 minutes apart (high speed train), similar situation for Cologne and Frankfurt (50 minutes). I do however believe that we will see more decentralized services once more air service agreements are negotiated on EU-level.


User currently offlineBehramjee From Canada, joined Aug 2003, 4825 posts, RR: 44
Reply 9, posted (7 years 3 months 3 weeks 6 days ago) and read 9616 times:

The German Govt may want to protect Lufthansa but it must realize the massive billions that EK has invested in Airbus aircraft of which the state of Germany holds a 20% stake in. On account of that, EK can play hard ball with the German Govt highlighting this issue and how much FDI they have brought into the German economy with their pax/cargo flights + creating jobs for Germans via investment in Airbus wide bodied aircraft etc etc.

User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 10, posted (7 years 3 months 3 weeks 5 days 23 hours ago) and read 9595 times:

Quoting Kevin777 (Reply 7):
Actually, I don't at all oppose EK flying TXL-DXB - that's indeed fair competition to LH; if you can't give it to the Berliners, EK will. But EK offering a tonne of capacity between, say, Frankfurt and Delhi, or Munich and Bangkok, no, that's not fair competition.

But the capacity isn't between Frankfurt and Delhi, it is between FRA and DXB and DXB and DEL. They are operating a hub system after all. Besides what right do they have to complain, when European carriers were benefiting from their geographical location between the US and Eastern Europe, the ME, and Asia. A large portion of the traffic these airlines carry from India, for example, is US or UK bound. Of course with the advent of correctly sized very long haul aircraft, they will eventually lose significant amount of this traffic as US and Indian carriers will be able to differentiate their routings with nonstop service and won't be at a disadvantage in picking up 5th freedom traffic in Europe.

Quoting Patroni (Reply 8):
This might also have to do with the fact that the individual European countries are significantly smaller than the USA? Frankfurt and Stuttgart are for example only 70 minutes apart (high speed train), similar situation for Cologne and Frankfurt (50 minutes). I do however believe that we will see more decentralized services once more air service agreements are negotiated on EU-level.

I think this has more to do with the fact that the state had the dominant role in the airline industry. A lot of focus was placed one or two large cities by one dominant state owned carrier, and governmental resources were invested to support those airlines. I would imagine the aviation industry and overall economy of European countries would look somewhat different without that centralization. Anyway the end result were large national airlines that had little competition even after privitization. And once these airlines became private they could comfortably consolidate operations further at their hub with little prospect of effective near term competition from airlines calling those smaller cities home.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineBoeingBoy From Bouvet Island, joined Jul 2007, 149 posts, RR: 0
Reply 11, posted (7 years 3 months 3 weeks 5 days 23 hours ago) and read 9586 times:

There are more than enough flights to Germany from the US. EK is barking up the wrong tree on this one.


10% is the best we can do
User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 12, posted (7 years 3 months 3 weeks 5 days 23 hours ago) and read 9556 times:

Quoting BoeingBoy (Reply 11):
There are more than enough flights to Germany from the US. EK is barking up the wrong tree on this one.

Who said anything about the US? EK wants to add additional Germany-DXB routings to increase passenger flow through their hub. That traffic would be Asia, Australia or maybe Africa bound.

[Edited 2007-07-30 02:43:21]


ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineSandroZRH From , joined Dec 1969, posts, RR:
Reply 13, posted (7 years 3 months 3 weeks 5 days 23 hours ago) and read 9543 times:

Quoting HUYfan (Reply 2):
Emirates is daring and succeeding where these incumbents are not interested

They may be "daring", but the point is that they have the money to back it up in case they fail or to keep routes running even when they ain't doing well, yes you know what im talking about. Same reason why they can justify their overcapacity-strategy, but that's another story.


User currently offlineLTU932 From Germany, joined Jan 2006, 13864 posts, RR: 50
Reply 14, posted (7 years 3 months 3 weeks 5 days 22 hours ago) and read 9476 times:

Quoting Atmx2000 (Reply 12):
Who said anything about the US? EK wants to add additional Germany-DXB routings to increase passenger flow through their hub.

Remember that EK is operating DXB-HAM-JFK with 5th Freedom Rights in and out of HAM, plus there was speculation about EK possibly starting up another US route out of DXB with a stop in Germany with 5th Freedom Rights. DUS was one of the possible locations mentioned for that stop.


User currently offlineBehramjee From Canada, joined Aug 2003, 4825 posts, RR: 44
Reply 15, posted (7 years 3 months 3 weeks 5 days 22 hours ago) and read 9476 times:

EK can do really well from TXL as there is a size able 6th freedom market segment to capture via DXB bound for the Far East, East/Southern Africa and Australia + high yielding diplomatic/political/embassy staff traffic as TXL is Germany's capital city  Wink

I have my doubts about Stuggart though!!!

An easy way out from this is to reduce DUS to daily instead of the current double daily and re-route that additional DXB-DUS daily flight to TXL instead.


User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Reply 16, posted (7 years 3 months 3 weeks 5 days 17 hours ago) and read 9278 times:

Alot of people said Australia will not grant extra rights to EK and they finally did.... Also there was speculation about Canada and it seems they are also eventually granting the right.... I think business is business for many of these airports and they really are more concerned about major carriers operating out of their terminals than protecting their local airlines. So eventually the German Govt will most probably give in and allow EK the extra rights.

Maybe not soon... but eventually they will cause Berlin would definitely want EK's business

Then again I might be wrong


User currently offlinePanHAM From Germany, joined May 2005, 9656 posts, RR: 31
Reply 17, posted (7 years 3 months 3 weeks 5 days 17 hours ago) and read 9238 times:

Lufthansa is a world airline and picks up a lot of 6th freedom traffic all over the world. Exactly what EK does. LH enjoys and still uses 5th freedom rights in the UAE, not for passengers but for freight. A bit less now than in the past, before they switched the Far East stop over to Astana. That agreement slapped back on them when EK started their 5th freedom HAM/JSK flight., Nobody thought about that, when the agreement was negoitiated with the UAE. Stuff happens

LH is sitting in thre glass house actually. I am not sure if they intervened or if our clueless Transport Minister acts on his own. Whatever, LH is a global contender and they should fight EK with a better product,not with over protection.

.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 18, posted (7 years 3 months 3 weeks 5 days 14 hours ago) and read 8986 times:

Quoting Atmx2000 (Reply 5):
I suspect this will some how get tied into the politics of ordering planes from Airbus.

Indeed, I'm surprised that no one brought out the potential consequences sooner on this young thread. From Emirates' point of view, this likely smacks of protectionism and could rankle very much. After all, they are the single largest A380 customer and have taken an investment stake in EADS. IMO, the forthcoming deal for 100 or so twin aisles is Airbus' to lose, but this is a good start down that road.

I fully understand the reaction on the part of the European governments to protect their (national) carriers, but it shouldn't come as a surprise when one sells them 55 or so very large, capacious jets that they will see them in their back yard someday. Will it come down to making a choice between selling airplanes or thousands of jobs put at risk with the likes of LH, AF, IB, et al?



"When all is said and done, more will be said than done".
User currently offlinePanHAM From Germany, joined May 2005, 9656 posts, RR: 31
Reply 19, posted (7 years 3 months 3 weeks 5 days 13 hours ago) and read 8935 times:

Quoting Lumberton (Reply 18):

Indeed, I'm surprised that no one brought out the potential consequences sooner on this young thread.

I am surprised this comes up at all. What does the order for planes have to do with the granting of traffic rights? I do not see the bargaining point. LH and AF are prvate companies. In state run France, M. Sarkozy may dictate the CEO of AF, in Germany, LH is a totallly privetaly owned company, the state has no saying whatsoever and the board of directors report to the supervisory board and both to the shareholders.

Although I believe in free market, I have a certain sympathy for market protection if one player takes unfair advantage. One could argue that the UAE, with only 2 viable destinations is probably asking too much since not only EK but also EY are enjoying traffic rights to and from Germany. With that, we have another 14 weekly frequencies plus freighters plus the EK 5th freedom route to JFK.

Applying your logic, I'd say - buy more Airbus, guys.

.

.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 20, posted (7 years 3 months 3 weeks 5 days 13 hours ago) and read 8919 times:

Quoting PanHAM (Reply 19):
I am surprised this comes up at all.

With all respect, I suggest that to maintain the two issues will remain distinct and "compartmentalized" is naive. What will the Airbus governments do if EK does link the two? After all, Dubai Inc owns a significant chunk of the A380 order book. If you were the Sheik and had spent loads of money ordering aircraft from Airbus, wouldn't you use every bargaining chip at your disposal? One can't blithely dismiss the possibility IMO.



"When all is said and done, more will be said than done".
User currently offlinePanHAM From Germany, joined May 2005, 9656 posts, RR: 31
Reply 21, posted (7 years 3 months 3 weeks 5 days 13 hours ago) and read 8713 times:

Quoting Lumberton (Reply 20):
ook. If you were the Sheik and had spent loads of money ordering aircraft from Airbus, wouldn't you use every bargaining chip at your disposal

what is your "bargaining chip"? There are signed and valid contracts to buy a number of A380. The 2 years delay has been compemnsated - see the various threads about this topic. What bargaining power has "The Sheikh" now? If he wants to breach a contract, the global law firms will come down like vultures on them. Their credit rating (yes, they need financing as well and some of the EK aircraft have been financed through funds in Germany for instance) would collapse. Besides, EK needs these planes for expansion, if not in Germany or France, in other areas they do not yet fly to. Look at the market for large airliners - where could they buy comparable aircraft with similar delivery slots? It's highly competetive, but still a sellers market.

Free market and competetion is fine but like everything in this world, it has to be reasonable. BTW - before EK starts complaining about Germany take a look at France. 2 daily flights to Paris and 3 x weekly to Nice, c'est tout. I guess, EK should start MRS, LYS and TLS first and double frequencies to the huge Parius market. They understand that kind of bargaining better in state run France anyway.





.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineTexan From New Zealand, joined Dec 2003, 4283 posts, RR: 52
Reply 22, posted (7 years 3 months 3 weeks 5 days 11 hours ago) and read 8093 times:

Quoting SandroZRH (Reply 13):
They may be "daring", but the point is that they have the money to back it up in case they fail or to keep routes running even when they ain't doing well, yes you know what im talking about.

Although the airline itself has produced hefty profits year over year and, while it is possible for them to tap into state money if they need to, they have not needed to for a good number of years now. Additionally, their costs are absolutely rock bottom, making it possible for them to fly thinner routes at a profit. While I agree with you and the many others who do not like the idea of the company being quasi-state owned or able to receive state assistance, EK have done an excellent job managing costs and growing the company. I don't believe that, by itself, the possible specter of state assistance should be enough to deny EK the right to expand in certain countries.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 23, posted (7 years 3 months 3 weeks 5 days 11 hours ago) and read 8066 times:

Quoting PanHAM (Reply 21):
what is your "bargaining chip"?

WRT Emirates, one is not dealing with a mere "airline", but a state owned carrier. Sure Flannagan and Clark are the very public face of this carrier, but in the end it is the Sheik and his brother, AKA the al Maktoums, AKA the Government of Dubai, AKA Dubai Incorporated, that must be reckoned with here. Frankly, none of us know the terms of the A380 contracts, and whether they are "allowed" to cancel is a moot point. The fact remains that they can cancel, regardless of whether or not they lose the deposits, etc. It's not like Airbus is the only OEM, is it? How can the EU in good conscience be for open skies across the Atlantic and not support Open Skies for their industrial champion's premier customer? Like it or not, Dubai Incorporated has very serious leverage here.

It appears we disagree on the leverage available here. Let's see what develops. Cynical old guy that I am, I expect EK's Airbus orders to be very much a part of any negotiations for access to Germany, France, Spain, and the UK.

Quoting PanHAM (Reply 21):
BTW - before EK starts complaining about Germany take a look at France.

I have no doubt this will come up to in the discussion with Emirates and the countries involved!



"When all is said and done, more will be said than done".
User currently offlinePanHAM From Germany, joined May 2005, 9656 posts, RR: 31
Reply 24, posted (7 years 3 months 3 weeks 5 days 11 hours ago) and read 7893 times:

Quoting Lumberton (Reply 23):

WRT Emirates, one is not dealing with a mere "airline", but a state owned carrier

We all know that, but as I said before, they rely on financing as well. The Al Makhtoums also know very well that they are the absolute rulers only within their Sheikdom, outside they are normal businssmen and have to act as such. Contracts are binding and the other OEM woud think twice before committing to build 50 748is for a client that does not observe contracts.

Personally, I think that LH should compete with them and since they have a daily 747 with good load factors and not everyone likes to be squeezed into a 773 with another 400++people , a number LH does niot put into their 744s. LH has a good point in that competition.and they can also use Swiss with their lower cost base to compete.

. ,



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
25 Post contains images Lumberton : The "other OEM" might decide to ask for a 50% deposit, too!   Seriously, before commenting that EK might, or might not, "observe a contract", one sh
26 Post contains images Jacobin777 : ...care to share what you mean by that? .....why is that? ..I find it funny so many people here are always harping so much against EK and the fact th
27 PanHAM : Well, look at it that way, Dubai Incorporated wants to hit big and become independent from oil. That can be done only, if business from wealthy people
28 Lumberton : While I agree with you on one level, let's wait and see how "reasonable" the parties will be on this. If the German government takes a hard line and
29 Post contains images OHLHD : What ever they want they won't achive it. Simple as that. Toooo many other airlines in this world.
30 Wsp : QR just celebrated the 10m-th passenger on the TXL-DOH route. Berlin would very much love to have EK do TXL-DXB to expand on that long-haul concept a
31 KL911 : They should concentrate on AMS/BRU first in my opinion/wish . Can't stand it not having the option of selling EK from AMS/BRU to my clients. I've had
32 Post contains images Philzh : That's the first time I ever heard that one! Swiss and lower cost... interesting combination, to say the least. EK seems to be going for a no-holds-b
33 Dallasnewark : You missed his point entirely, it all depends on what kind of govt is behind the airline and what are it's intentions UAE is doing great, the oil pro
34 Post contains links Philzh : AFAIK, Dubai has not that much Oil profits. Revenues from petroleum and natural gas contribute to less than 3% of Dubai's US$ 46 billion economy (200
35 Dallasnewark : If that's the case, that makes even more sense for UAE to market/promote/subsidize/support its state owned airline. I don't blame them, they want pre
36 Jacobin777 : ..I haven't missed the point..I was bringing up the concept that people here feel that EK has an advantage by virtue of being only semi-independent..
37 Texan : In this instance it is because I ended up reading and responding to this thread and I usually don't read or respond to threads about PR, SQ, etc beca
38 Post contains images Jacobin777 : ....to ya.. ...but I still stand by my comments...
39 Drogba : Lufthansa is very careful at TXL. I live in Berlin and you can see it every day. Lufthansa CRJ no.1, no.2, from time to time a B737 or an A320. After
40 Post contains images Kevin777 : Well, I don't quite agree here... If EK is offering a tonne of capacity FRA-DXB and DXB-DEL, they are offering a tonne of capacity in the FRA-DEL mar
41 Wsp : Interesting hypothetical. Flooding the market would imply flying empty planes. Is EK doing that on a regular basis? (QR started TXL with an A319, tha
42 PanHAM : The market is not there in Berlin. LH had a flight TXL-IAD and they lost money. If the Senate wants LH tooperate a loss making route they have to pay
43 Godbless : That is exactly the reason why I ask myself why LH doesn't let UA/US serve more destinations in Germany. They could connect BER, DUS or STR without h
44 SailorOrion : Maybe because they do not want? UA did serve DUS a while ago, first ORD, then IAD, then they pulled the route because they _apparently_ couldn't make
45 PanHAM : May be these carriers route planners have come to the same conclusion as LH . that they cannot make money serving these destinations, or - they can m
46 Wsp : That point applies to any small state. Finland has only one viable destination but still Finnair feeds their hub from every major German airport.
47 Sebring : The three frequencies to Toronto that EK is getting have been available to it for many years, only they kept demanding daily rights. In effect, EK ha
48 GodBless : Of course not. But the German Government shouldn't encourage this attitude. This is very childish. Is LH not happy about having a large home market t
49 PanHAM : Both Germany and Finland are members of a single market to which the UAE do not belong. The UAE and Germany have a very liberal agreement biut it is
50 EK413 : Considering these carriers have large funds of cash flow you cant really compare with the lucrative carriers... I would have to say this competitive
51 Post contains images DABZF : If I'm not mistaken Lufthansa Consulting had a role in the early years of EK's struggling operations and helped (at least to some extent) EK to it's f
52 PanHAM : I would not rate LH's actions as "childish". The company and the executives are very mature and they know what they are doing. LH has grown out of it
53 EK413 : Exactly, why should LH allow EK to serve every city on its own home turf... I bet EK wont allow it to happen on its own turf... EK413
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