Alaska Air questions Virgin America's US stat
From Associated Press:
ATLANTA — Alaska Airlines is questioning Virgin America's ownership status, asking the government to determine whether the fledgling airline continues to meet the qualifications for being a U.S. air carrier.
Burlingame, Calif.-based Virgin America, which launched in 2007, has said it is a U.S.-controlled and operated airline and is a separate company from Virgin Atlantic, which is controlled by British billionaire Richard Branson. The privately held airline has said Branson's Virgin Group is a minority holder in Virgin America.
But Alaska Airlines, a unit of Seattle-based Alaska Air Group, said in a statement today that recent media reports call into question Virgin America's compliance with U.S. foreign ownership and control restrictions on domestic carriers.
Alaska Airlines and Virgin America compete largely in Seattle, San Francisco and Los Angeles.
Alaska Airlines said it has petitioned the Department of Transportation to conduct a public inquiry into the citizenship status of Virgin America.
Under U.S. law, foreign ownership in a U.S. air carrier is limited to 25 percent. Alaska Airlines asserts that the carrier must also be effectively controlled by U.S. citizens.
Alaska Airlines cites reports of investors owning 75 percent of Virgin America's voting stock with imminent rights to sell their shares back to the foreign-owned Virgin Group and of new funding from investors, apparently including Virgin Group, under terms and conditions not revealed to the public.
"Only through a careful and ongoing review of Virgin America's recent actions conducted on the public record can the DOT and public be assured that Virgin will remain a U.S. citizen," said Keith Loveless, general counsel for Alaska Airlines.
A call to Virgin America's headquarters seeking comment was not immediately returned. Besides Alaska Airlines, parent Alaska Air Group also operates Horizon Air. Together, Alaska Airlines and Horizon Air serve more than 90 cities through their network in Alaska, Hawaii, the continental U.S., Canada and Mexico.
In November, Alaska Air Group signed an expanded marketing alliance with Atlanta-based Delta Air Lines, the world's biggest carrier. Executives said then that the move is expected to help feed passengers to support new international routes Delta has said it plans to launch this year. Delta's chief said then that the two carriers had not had any discussions about a combination.
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