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DL/DJ Revise JV Application To DOT  
User currently offlinejetlanta From United States of America, joined Jul 2001, 3250 posts, RR: 35
Posted (3 years 5 months 3 weeks 3 days 16 hours ago) and read 7041 times:

Well, it looks like DL and DJ are moving forward with their planned joint venture, despite the DJ/NZ situation. They submitted a revised application yesterday that promises no capacity cuts in their U.S.-Australia flying.

http://www.smh.com.au/business/fligh...-woo-regulator-20110201-1ace4.html

How this plays out in terms of alliances will be quite interesting.

77 replies: All unread, showing first 25:
 
User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 1, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6988 times:

Wouldn't it be great to be a meaningless fly on the wall during these meetings?

All these "Virgin Group" scenario's at play now makes this more interesting than the JL/AA/DL drama we experienced last year.
I seriously think there is a tug of war going on within the (semi-independent) Virgin Group carriers. We got SQ in this. NZ now has got their fingers sticky in it as well.

I'd propose an easy solution. NZ: you would find a better home within SkyTeam. You would stick out more in that alliance than you currently do with Star.

[Edited 2011-02-01 07:42:17]


Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlineSTT757 From United States of America, joined Mar 2000, 16817 posts, RR: 51
Reply 2, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6920 times:

Quoting peanuts (Reply 1):
NZ: you would find a better home within SkyTeam. You would stick out more in that alliance than you currently do with Star.

NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinejetlanta From United States of America, joined Jul 2001, 3250 posts, RR: 35
Reply 3, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6885 times:

Quoting STT757 (Reply 2):
NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..

Well, also CZ, MU, GA and VN. Prime time markets for Australia/NZ.


User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 4, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6860 times:

Quoting peanuts (Reply 1):
I'd propose an easy solution. NZ: you would find a better home within SkyTeam. You would stick out more in that alliance than you currently do with Star.

Huh, I am lost with that statement, goodness knows how you feel they would be better off in ST as opposed to Star.

Quoting STT757 (Reply 2):
NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..

Exactly. I dont get it.

Anyway back to the main thread...

Quoting jetlanta (Thread starter):
How this plays out in terms of alliances will be quite interesting.

Very interesting indeed. Is there a timetable here or will it take as long as it takes and can others object and look to slow up the process if not try to derail it altogether.


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 5, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6852 times:

Quoting STT757 (Reply 2):
NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..

Thanks for making my point, they would stick out more...they would have a more important role for DL, AF, KE. Which would be good for NZ and the alliance it serves.
Just one tiny example: LAX-LHR on NZ would be great for SkyTeam. NZ is currently "competing" within Star with UA for that, makes no sense.

Obviously they are fine for now. But I've predicted in the past a few major flag carriers may bail on their alliance in the next 5-7 years. I think NZ could be a candidate.

Virgin Group carriers are the "drivers" now of heated discussions in the alliance world. Of that I'm sure.



Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlineocracoke From United States of America, joined Jan 2008, 680 posts, RR: 1
Reply 6, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6748 times:

Quoting STT757 (Reply 2):
NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..

Going back to the future. Before the whole alliance thing started in masse, DL and NZ used to be codeshare partners across the Pacific, going against UA. SO....it wouldn't be unchartered territory for either carrier.


User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 7, posted (3 years 5 months 3 weeks 3 days 15 hours ago) and read 6730 times:

Quoting peanuts (Reply 5):
Just one tiny example: LAX-LHR on NZ would be great for SkyTeam. NZ is currently "competing" within Star with UA for that, makes no sense.

But both carriers do well on that route and arguably don't compete that much against each other, UA takes a lot of the O & D and NZ takes some but mostly I am sure the onwards loads to and from NZ transitting via LAX. Just because AF could not make the route work why use that as an example why NZ would consider jumping alliance. DL is more than capable of starting up LAX-LHR is it not?? I think we would need to see a much better reason than that.


User currently offlinebobnwa From United States of America, joined Dec 2000, 6443 posts, RR: 9
Reply 8, posted (3 years 5 months 3 weeks 3 days 14 hours ago) and read 6659 times:

Quoting STT757 (Reply 2):
NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..

Looks like good stuation for NZ to me.


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 9, posted (3 years 5 months 3 weeks 3 days 14 hours ago) and read 6648 times:

Quoting UAL777UK (Reply 7):
DL is more than capable of starting up LAX-LHR is it not??

Possibly. But having another carrier (NZ) build up the route for SkyTeam in the meantime may be smart also. DL metal later on if the route warrants it for them.

Like I said, the LAX-LHR within Star is just a tiny example.
NZ can sometimes appear gobbled up with a strong South Pacific carrier like UA.
Alliances are not always about "blending in". They're about offering something unique to the alliance as a whole.
In general network coverage comparisons, NZ stands a lot to gain taking another look at their current commitments.

Skyteam has done very well in Asia finding partners. NZ could find a great niche for itself, without UA's dominance.

BTW: Sorry if this all appears off topic, I just realized it may give that impression. However, it's all related somehow, possibly... Wink

[Edited 2011-02-01 08:44:06]


Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17337 posts, RR: 46
Reply 10, posted (3 years 5 months 3 weeks 3 days 14 hours ago) and read 6583 times:

Quoting STT757 (Reply 2):
NZ would lose UA, LH and ANA if they left Star. For what?.. DL, AF, and KE?..
Quoting jetlanta (Reply 3):
Well, also CZ, MU, GA and VN. Prime time markets for Australia/NZ.

They're barely prime time markets for Australia. Eventually they may be, but you're trading sizeable local markets and good connectivity for just connectivity--if that: TYO for SEL, SIN for CGK, BKK for SGN, PEK for CAN. The only benefit would be PVG.



E pur si muove -Galileo
User currently offlinejetlanta From United States of America, joined Jul 2001, 3250 posts, RR: 35
Reply 11, posted (3 years 5 months 3 weeks 3 days 14 hours ago) and read 6473 times:

Quoting MaverickM11 (Reply 10):
They're barely prime time markets for Australia. Eventually they may be, but you're trading sizeable local markets and good connectivity for just connectivity--if that: TYO for SEL, SIN for CGK, BKK for SGN, PEK for CAN. The only benefit would be PVG.

The Indonesia-Australia market is very large. And the Jakarta hub can be an excellent gateway to Asia for Australia.


User currently offlinedelimit From United States of America, joined Jan 2009, 1502 posts, RR: 2
Reply 12, posted (3 years 5 months 3 weeks 3 days 13 hours ago) and read 6441 times:

Why would NZ trade United for Delta when their US gateways are LAX and SFO? Delta may be building nicely in LAX, but honestly, for NZ, UA is a far better partner.

Quoting peanuts (Reply 9):
Skyteam has done very well in Asia finding partners. NZ could find a great niche for itself, without UA's dominance.

I really don't see how Delta would be less dominant than UA. In fact, given the respective alliance dynamics, I think NZ is probably better off staying in Star.

[Edited 2011-02-01 09:38:14]

User currently offlineordjoe From United States of America, joined Aug 2010, 691 posts, RR: 0
Reply 13, posted (3 years 5 months 3 weeks 3 days 13 hours ago) and read 6413 times:

Quoting jetlanta (Reply 11):
Indonesia-Australia

It is large, but the yields I imagine can not be that great, heavy leisure traffic, LCC's. That's the other things, why give up being in an established alliance with premium fortress city made up of the more premium airlines in exchange for an alliance with mostly 2nd tier cities and airlines that are less than premium.
Last point, I thought you needed an openskies agreement between OZ and USA to do with which is not in place yet, I thought that is the tie up of AA wanting ATI/JV with QF TPAC


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17337 posts, RR: 46
Reply 14, posted (3 years 5 months 3 weeks 3 days 13 hours ago) and read 6359 times:

Quoting jetlanta (Reply 11):
And the Jakarta hub can be an excellent gateway to Asia for Australia.

For Australia, perhaps, although QF can muster little more than a few weekly JQ 320s and the odd SYD nonstop; for NZ however, forget it.

[Edited 2011-02-01 09:52:49]


E pur si muove -Galileo
User currently offlineLAXintl From United States of America, joined May 2000, 24820 posts, RR: 46
Reply 15, posted (3 years 5 months 3 weeks 3 days 13 hours ago) and read 6261 times:

Quoting jetlanta (Thread starter):
They submitted a revised application yesterday

A bit of a difference. They did not file a new application.

All the parties have done is formally filed a response to the denial order which the DOT issued in October.

Following the interim denial the parties in November asked the DOT for additional time to come up with pleadings for reconsideration.

The only new bone I see is the carriers pleadings is a promise to maintain a level of flight activity to help eliminate concerns that JV would reduce market service levels.
Otherwise its pretty bland with simply updates on the progress of DJ getting its reservations platform ready, and updates on the carriers progress with 3rd country (Canada, NZ. Mexico) applications.



From the desert to the sea, to all of Southern California
User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8541 posts, RR: 13
Reply 16, posted (3 years 5 months 3 weeks 3 days 12 hours ago) and read 6141 times:
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Quoting peanuts (Reply 1):
I'd propose an easy solution. NZ: you would find a better home within SkyTeam.

Air New Zealand has spent years working on their Star relationships , what exactly would Sky Team offer that would justify all the costs associated with jumping ship ?

Quoting ocracoke (Reply 6):
DL and NZ used to be codeshare partners across the Pacific,

Really ? I don't recall this at all , do you have a source for this ?



Moderation in all things ... including moderation ;-)
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3589 posts, RR: 10
Reply 17, posted (3 years 5 months 3 weeks 3 days 11 hours ago) and read 6104 times:

Quoting LAXintl (Reply 15):
The only new bone I see is the carriers pleadings is a promise to maintain a level of flight activity to help eliminate concerns that JV would reduce market service levels.

I would add one more bone that is probably the most important one when it comes to DOT reconsideration, the Australian Government openly lobbying for the DOT to approve the JV. I think the level of flight activity promise is just giving the DOT cover to change their decision in light of the Australian Government's position.

We will see soon enough, but this is a political decision when push comes to shove.


User currently offlineVirginFlyer From New Zealand, joined Sep 2000, 4537 posts, RR: 41
Reply 18, posted (3 years 5 months 3 weeks 3 days 11 hours ago) and read 6024 times:

Quoting kiwiandrew (Reply 16):
Really ? I don't recall this at all , do you have a source for this ?

I remember it too - mid nineties (I'm wanting to say 1997 but I'm not certain). I distinctly remember an advert for it at the time with the text "Bravo Yankee Delta" (which I always thought was ironic given where Delta is based...)

V/F



"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 19, posted (3 years 5 months 3 weeks 3 days 11 hours ago) and read 5948 times:

Quoting kiwiandrew (Reply 16):
what exactly would Sky Team offer that would justify all the costs associated with jumping ship ?

It's complicated. Many companies in the past have spent meaningful investments and time on a project only to walk away from it when a better long term solution was found.

All we can do is speculate.

Maybe NZ will encounter an impasse at some point with its business deals with DJ.
What if (big IF) VS becomes involved with DL more and persuades DJ and NZ to join the "happy family".
If VS commits to SkyTeam, it could change everything for NZ.

We just don't know.



Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlinebobnwa From United States of America, joined Dec 2000, 6443 posts, RR: 9
Reply 20, posted (3 years 5 months 3 weeks 3 days 10 hours ago) and read 5894 times:

Quoting peanuts (Reply 9):
NZ could find a great niche for itself, without UA's dominance.




Are you saying that UA is dominant in Asia compared to DL/NW? I don't think so.


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 21, posted (3 years 5 months 3 weeks 3 days 10 hours ago) and read 5852 times:

Quoting bobnwa (Reply 20):
Are you saying that UA is dominant in Asia compared to DL/NW?

No.

Was more referring to South Pacific.

Quoting peanuts (Reply 9):
NZ can sometimes appear gobbled up with a strong South Pacific carrier like UA.

In SkyTeam, I think DL would give NZ, DJ and VA pretty much free reign in Oceania, aside from maybe one LAX-SYD/LAX-MEL flight on DL metal.

[Edited 2011-02-01 12:59:51]


Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8541 posts, RR: 13
Reply 22, posted (3 years 5 months 3 weeks 3 days 10 hours ago) and read 5784 times:
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Getting back to the main topic of the thread ( sorry , I have been as guilty as anyone of dragging it OT ) , I am always skeptical of promises not to cut capacity ... realistically they must always have an escape clause of some sort because no airline is going to sign any agreement which requires them to retain a fixed level of service even if the economy tanks and the route turns into a major loss maker .

http://www.smh.com.au/business/fligh...-woo-regulator-20110201-1ace4.html

...In a response to a request from the US Department of Transportation for more information, Virgin Blue and Delta, the world's largest airline, said they had signed a ''mutual capacity commitment agreement'' which guaranteed they would not reduce non-stop services between Australia and the US ...

I am sure that there must be some sort of escape clause in there , the question is , what does it take to actually invoke it and reduce capacity .



Moderation in all things ... including moderation ;-)
User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 23, posted (3 years 5 months 3 weeks 3 days 10 hours ago) and read 5788 times:

Quoting peanuts (Reply 21):
aside from maybe one LAX-SYD/LAX-MEL flight on DL metal.

But UA only has one more flight than what you would suggest already, SFO-SYD, hardly what I would call gobbling up NZ in Oceania.

I appreciate that UA will start IAH-AKL in 2012 or whenever the 787 joins the fleet but you can assume that if there was no NZ in Star,UA would still be flying west coast to AKL. Lets not forget that NZ no doubt does very will out of SFO thanks in part to UA. In summary NZ strikes me as doing very well with UA in the South Pacific and they work well side by side, I dont see what DL brings to the table that would even get NZ to consider jumping alliances.


User currently offlinenzrich From New Zealand, joined Dec 2005, 1521 posts, RR: 1
Reply 24, posted (3 years 5 months 3 weeks 3 days 10 hours ago) and read 5756 times:

Quoting peanuts (Reply 21):
Was more referring to South Pacific.

I would hardly call United dominate in the South Pacific !! NZ would be more dominate in the south pacific linking nearly every south pacific island with New Zealand Australia and the USA . There is only one route that NZ and UA compete on directly and thats LAX-LHR , which is not even in the South Pacific . Even that route NZ really needs no support from any other airline as it's a market they have been in for ages .



"Pride of the pacific"
25 Post contains images peanuts : It's not only about DL however. It's about SkyTeam. I think VS is just the wild card right now. No idea what will happen. I think if VS goes SkyTeam
26 RyanairGuru : Other than SYD-LAX and SFO UA are *not* a dominant carrier. Here in Brisbane most people have never even heard of them. NZ *ARE* the primary Star car
27 anonms : The new United includes Air Mike, which is pretty dominant in the South Pacific/Oceania.
28 Ota1 : Well, Oceania maybe but I don't see how Air Mike can be dominant in the South Pacific when the vast majority of their destinations is located in the
29 LAXtoATL : You may be right, but then why would they be actively pursuing a JV with DL? I don't know enough about that region to have a clue which alliance is b
30 Cubsrule : I don't understand this assertion - and people made a similar one with respect to DL/AA/JL as well. Where's the hard evidence that the US government
31 tullamarine : Whilst DJ may eventually join an alliance, I don't think an alliance membership is going to rule its strategy. In many respects the creation of allian
32 goldenstate : To say this on the same day DL/DJ filed a response to the DOT tentative order is, even by airliners.net standards, laughable.
33 DLPMMM : Just watch how fast JV/ATI is approved for AA/JL and UA/NH. It is called diplomacy and it is how international politics works. If you think the USA g
34 Cubsrule : Which proves what? The Japanese government wanted and wants a 'bailout' for JL, not ATI.
35 LDVAviation : Not necessarily. If what LAXintl said above is true, then there is nothing in the revised application to suggest that the arrangement between DL/DJ i
36 Ota1 : I think speculating that NZ would jump ships to SkyTeam because of DJ and VS (which both aren't even members of that alliance nor have even recently
37 Post contains images deltal1011man : why? QF and AF codeshare AF and JL codeshare DL and SQ just dumped its FF deal not to long ago and who says NZ buying into DJ means they are going in
38 LAXtoATL : I think you are missing my point. I don't how care easy it would or wouldn't be for DJ & DL to desolve their JV, if DJ is in the process of joini
39 Post contains images kiwiandrew : I have to admit that to me this points away from any short term move towards *A for DJ ( as disappointing as that is for me die-hard *A fanboy that I
40 Ota1 : because code sharing or FFP agreements and a JV are just not the same. QF for example is no direct competitor to SkyTeam member, nor is JL or SQ, DL
41 mariner : LOL. Why not? After all, where does Etihad fit into the mix? mariner
42 LAXtoATL : we think a like on this one
43 DLPMMM : No, the Japanese Government insisted that ATI/JVs be approved by the DOT for BOTH NH and JAL. It was a condition for the implementation of the new bi
44 Cubsrule : . . . in which the US had little or no interest. It's nice to have, but it's not what State has said it wants from bilaterals.
45 MaverickM11 : 4Q10 numbers for Pacific revenue @ UA $1093M, @ DL $721M
46 goldenstate : Not a very meaningful comparison unless you have ASM data to go along with it. Even less meaningful as a comparative snapshot when you consider the f
47 MaverickM11 : Uh ok, UA produced 50% more revenue in the Pacific than DL, but here are the traffic data for 2010: RPMs DL 22,311,223 UA 31,875,965 (43% more) ASMs
48 goldenstate : Have to admit to being a bit surprised that you of all posters would throw out absolute revenue numbers on their own as a definitive comparative meas
49 DLPMMM : What do you mean "State had little or no interest in"? The State Department negotiated it and sent it up for ratification! Why do you think HND slots
50 Cubsrule : Not opposing is quite different from supporting or pushing for. I've seen no evidence that any part of the government was dying to have this deal. Ha
51 jetlanta : Have you seen evidence they weren't supporting or pushing for it? I mean, I have no idea. But if they negotiated and signed it, I assume they support
52 LDVAviation : It is a JV in name only. That was the DOT's primary objection. Look up the DOT's show cause order. Given what is actually being proposed, there isn't
53 Cubsrule : Well, State said - before and after - that their primary objective in the bilateral area was (true) Open Skies, and this bilateral obviously isn't. S
54 goldenstate : When you say "this bilateral obviously isn't," are you referring to Japan or Australia? I think you could make the argument that Japan is a very uniq
55 Cubsrule : If so, why not approve it in the first place? I expect there was plenty of behind the scenes lobbying from Australia before the initial denial, at le
56 DLPMMM : Why would the Australian government lobby in this case before the initial ruling by the DOT? what evidence do you have of this? We have evidence of th
57 Cubsrule : Why not, if it mattered that much to them?
58 DLPMMM : Please try to think logically about the process and events rather than throw out non-germaine facts and ill concieved questions. I will humor you thi
59 Cubsrule : I guess I'm lost in this statement. You put up this wall between Australian regulators and Australian diplomats but do no such thing in the States. I
60 DLPMMM : What is so difficult for you to understand? I put up no "walls" around anyone. You seem to not understand that the regulators are arms of the politic
61 Cubsrule : You're suggesting that the Australian diplomats' intercession was based on the regulators' analysis, right? If that's the case, why would the US regu
62 DLPMMM : No. I never suggested anything of the kind.
63 goldenstate : I took the liberty of reordering your questions because I think the answer to the above question in part addresses the below question. When I say "wo
64 Cubsrule : I'd agree - I just don't think it will be determinative. I think (and I've said previously) that it's dumb to have held this JV up at all, but the go
65 DLPMMM : There was no reason for the Australian diplomats to concern themselves with the issue at all until the USA regulators denied the JV application, as t
66 Post contains images mariner : It's hard to know how they could ask the US to reconsider - until there was something to reconsider. mariner
67 Cubsrule : That may be the crux of our disagreement. To me, the denial, at least the first time around, was pretty much a foregone conclusion.
68 DLPMMM : I never had an opinion on if the JV would be approved or denied by either government's regulatory body the first time around, so I don't know how tha
69 Cubsrule : Why, then, have we not seen a seismic shift between the Bush and Obama administrations? You assume that the Australians, DL, and DJ didn't know what
70 DLPMMM : You are assuming that there is some major difference between the administrations. Because they are all just self serving sleezy little politicians an
71 mariner : They might have had a very strong clue, but to have lobbied before that would suggest they thought the application was in danger and needed help. And
72 Post contains images Cubsrule : What, then, is their second effort?
73 DLPMMM : The appeal process. What is your point? Do you really need to have the application and appeal process and the chain of events repeated to you over an
74 kiwiandrew : So , any guesses what happens if they get turned down again ? Will they revise and try a third time or just call it quits ?
75 Cubsrule : But if their first application was their "best effort," then there'd be nothing to alter during the appeal because you can't get better than best. I'
76 DLPMMM : I would suggest that the people making the application for DJ and DL are alot better informed about the process and the best strategies to gain appro
77 Cubsrule : You've lost me. Didn't I just say that they took the right strategy? The difference between where I would have started and where they did is what the
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