U.S. says Virgin America can't fly as structured
12-27-2006, 01:34 PM
#1
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Joined APC: Aug 2005
Position: Retired 121 pilot
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U.S. says Virgin America can't fly as structured
U.S. says Virgin America can't fly as structured
Wednesday December 27, 5:08 pm ET
WASHINGTON (Reuters) - U.S. transport regulators said on Wednesday they had tentatively rejected Virgin America Inc.'s application to fly, saying its ownership structure did not meet a U.S. citizenship test.
The U.S. Department of Transportation said the low-cost airline, with a name made famous by British entrepreneur Richard Branson, did not meet the requirement that 75 percent of its voting interest be owned or controlled by U.S. citizens.
Virgin America said it would respond to the department on January 10 and demonstrate that it will meet the ownership and control requirements.
"We remain committed to getting our wings," said Virgin America in a statement. The airline had said last week it was expecting the rejection.
Virgin America has faced opposition from U.S. carriers such as Continental Airlines (NYSE:CAL - News), who argue that Branson's Virgin Group (VA.UL) effectively controls the airline in violation of U.S. law.
In rejecting the application for an operating certificate, the department cited Virgin Group's and its executives' pervasive involvement in the creation of Virgin America.
It also cited the funding Virgin Group provided to the carrier, various interlocking financial agreements, and Virgin Group's ability to influence decisions of the carrier's board.
The department added that the restrictive name-brand licensing agreement between Virgin Group and the airline impedes the carrier's independent, decision-making authority.
"... properly structured licensing or franchise agreements between U.S. and international carriers are now, and will continue to be, permissible," the department said in a statement.
British-based Virgin Group has stakes in airlines in Europe, Australia and Nigeria.
The company has 33 Airbus planes on order and was planning to start operation with just two to four aircraft, beginning with a San Francisco-New York route.
Wednesday December 27, 5:08 pm ET
WASHINGTON (Reuters) - U.S. transport regulators said on Wednesday they had tentatively rejected Virgin America Inc.'s application to fly, saying its ownership structure did not meet a U.S. citizenship test.
The U.S. Department of Transportation said the low-cost airline, with a name made famous by British entrepreneur Richard Branson, did not meet the requirement that 75 percent of its voting interest be owned or controlled by U.S. citizens.
Virgin America said it would respond to the department on January 10 and demonstrate that it will meet the ownership and control requirements.
"We remain committed to getting our wings," said Virgin America in a statement. The airline had said last week it was expecting the rejection.
Virgin America has faced opposition from U.S. carriers such as Continental Airlines (NYSE:CAL - News), who argue that Branson's Virgin Group (VA.UL) effectively controls the airline in violation of U.S. law.
In rejecting the application for an operating certificate, the department cited Virgin Group's and its executives' pervasive involvement in the creation of Virgin America.
It also cited the funding Virgin Group provided to the carrier, various interlocking financial agreements, and Virgin Group's ability to influence decisions of the carrier's board.
The department added that the restrictive name-brand licensing agreement between Virgin Group and the airline impedes the carrier's independent, decision-making authority.
"... properly structured licensing or franchise agreements between U.S. and international carriers are now, and will continue to be, permissible," the department said in a statement.
British-based Virgin Group has stakes in airlines in Europe, Australia and Nigeria.
The company has 33 Airbus planes on order and was planning to start operation with just two to four aircraft, beginning with a San Francisco-New York route.
12-27-2006, 03:14 PM
#4
Gets Weekends Off
Joined APC: Nov 2006
Posts: 135
Gosh...wasn't Don Carty supposed to be the new Chairman of this airline?
Don took a new job just days ago as CFO of DELL; so, I guess he knew this was coming.
Even though DELL is being investigated for accounting irregularities...and Don was Chairman of the DELL Board audit committee for the last three years or so.
Ethics...not in Texas.
Jetblaster
Don took a new job just days ago as CFO of DELL; so, I guess he knew this was coming.
Even though DELL is being investigated for accounting irregularities...and Don was Chairman of the DELL Board audit committee for the last three years or so.
Ethics...not in Texas.
Jetblaster
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