Source: AFP Author: 01/09/2010
Subject Concerned: Government Airlines
Virgin America has maintained its status as a domestic U.S. carrier after agreeing to a series of changes in its ownership and management structure, officials said on Jan. 8.
The Department of Transportation (DOT) said its review concluded that the carrier loosely tied to Richard Branson's British-based Virgin Group "remains a U.S. citizen and remains under the actual control of U.S. citizens".
Virgin America was certified as a domestic carrier in 2007 but that came into doubt later after it notified U.S. authorities of a change in its shareholder makeup.
The low-cost airline has licensed the "Virgin" brand from Virgin Group, and maintains it is independent from the companies headed by Branson, who founded Virgin Atlantic and a host of other Virgin-branded firms.
DOT said Virgin America "agreed to make a number of changes to ensure that the air carrier would remain under the ownership and actual control of U.S. citizens".
DOT said the group agreed to raise new capital from "entities other than the Virgin Group", which holds a 25 percent stake in Virgin America.
"Virgin America also will add an additional U.S. citizen to its board, resulting in seven U.S. citizen investor designers as voting members on the nine-member board," the DOT said in a statement.
DOT said it dismissed petitions by Alaska Airlines and the Aircraft Mechanics Fraternal Association for a public inquiry into Virgin America's qualifications to be a domestic carrier.
"Today is a great day for airline competition, for our travelling guests and for our teammates," said Virgin America president and chief executive David Cush.
"We're extremely pleased with the Department of Transportation's announcement. With this behind us, we intend to focus on what we do best: injecting new competition into markets as we grow, creating new jobs and delivering an unrivalled guest experience."
The carrier said 75 percent of its shares are held by the US-based VAI Partners, LLC, and 25 percent held by Virgin Group. However, the US investors comprising VAI Partners will change with the largest share held by Cyrus Aviation Investor, LLC, which is related to the investment group Cyrus Capital.