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Oberstar Questions Virgin America

JumpJetter

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http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=aviationdaily&id=news/OBER04039.xml



An influential U.S. lawmaker on transportation issues is pressing the Transportation Dept. to investigate whether Virgin America still qualifies as a U.S. carrier under federal law.
Rep. James Oberstar, D-Minn. who holds clout as chairman of the U.S. House Committee on Transportation and Infrastructure, sent a letter to Transportation Secretary Ray LaHood April 2 in which he questioned Virgin America’s continuing compliance with federal requirements that U.S. carriers be owned and controlled by U.S. citizens.
Oberstar cited media reports that he said “may indicate that Virgin America is outside the legal limits for foreign ownership.”
Oberstar has been a major proponent of keeping strict controls on how the DOT interprets U.S. ownership and control of U.S. carriers.
The letter builds on complaints filed with the DOT by Alaska Airlines, which first cited a Wall Street Journal report that the two U.S. equity funds that owned a majority of the carrier could exercise an option to sell back their stakes, and then a second Wall Street Journal report that said they had (DAILY, March 13). Some labor unions have supported Alaska’s position.
Virgin America, however, has insisted that its agreements with those investors anticipated the scenario and included DOT-approved measures that ensured ongoing U.S. ownership and control. Sources familiar with the airline’s contract with the U.S. investors said that’s possible because, under that deal, even if Black Canyon Air Partners and Cyrus New Joint Structure redeem the “economic value” of their stock, they retain voting power and control of their stock until Virgin America finds U.S.-based replacements (DAILY, March 12).
That’s not a situation, however, that would sit well with Oberstar.
“If the equity funds have no further stake in the success of the company, there is serious question as to whether their continued title to the shares is sufficient grounds for them to be considered the owner of the stock, for the purpose of the statutory requirement that a U.S. carrier must have 75% of its voting stock owned or controlled by persons that are citizens of the United States,” Oberstar wrote.
Oberstar asked LaHood to order a comprehensive review of the accuracy of the news reports, and, if the reports are proven correct, to conduct a public proceeding to examine the question of Virgin America’s citizenship.
Virgin America has said that it has kept the DOT apprised of the situation.
 

ImbracableCrunk

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So Virgin's argument is that they're not foreign controlled because some American guys that previously had money invested still retain voting power? And they gave the "economic value" back to Branson?

So Branson has all of the "economic value," but he isn't in control?

Hmmmm.
 

N1atEcon

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under that deal, even if Black Canyon Air Partners and Cyrus New Joint Structure redeem the “economic value” of their stock, they retain voting power and control of their stock until Virgin America finds U.S.-based replacements
That is complete B.S. I am glad he is pushing the DOT to investigate this.
 

~~~^~~~

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The golden rule - He who has the gold, makes the rules.

Glad someone is asking the DOT to do their flipping job. I can't run a red light without an instant picture being made and a ticket mailed to my house. Justice is terribly swift if the government figures they can take some cash out of your pocket. But if a multi million dollar Company decides to just blow off the United States Department of Transportation... 'eh, why not.

One of the problems I had was Bush was that the Executive Branch of government did not execute much of anything, Saddam excepted. Obama may rely on 27 year old Harvard snot noses, but hopefully they have enough faith in government to at least execute some of the laws that are on the books.
 

Raoul Duke

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There are other carriers that have instituted similar "voting" restrictions. Hawaiian in particular - when it exited BK several investors were using $$$ from offshore sources. To keep the DOT happy, they vested voting rights with other US based entities. Just because Oberstar does not like it does not really matter.
 

Fubijaakr

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I guess the difference is that an American individual can get the money from overseas. In this case the money has got some American puppets to to his bidding.
 

Raoul Duke

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I guess it depends on if the DOT is focused on voting rights - which they have in the past. If so, Virgin is going to be fine. If not, different story.
 

clickclickboom

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Be careful or the VA cronies will accuse you of all kinds of horrible things..

hate to see anybody out of work if they ever got shut down but when you are operating at a -50% margin " Just for the fun of it " It is hurting more people industrywide.

I would rather see healthy successful airlines ( If there even is such a thing ) make profits and restore this profession.

Jetblue should have been the last craphole undercutting airline to come along but unfortunately all you need is a dream, certificate, and deep pockets and you can invent your own airline that flies on the backs of their employees subdtandard pay and benefits.
 

AA717driver

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Geez. You guys act like business is conducted in an open, fair, legal--above-board manner in this country.

We are as corrupt as any other country out there when it comes to business and politics.

Fins is right--we proles get hammered by the system the second we step outside the narrow, grey line. If we had big bucks to lobby politicians, you'd never see a red-light or photo-radar camera. The Fourth Amendment is toilet paper to greedy municipalities.

Re: '27 year-old Harvard snot noses'. They have no more regard for the Constitution or "what is right" than their predecessors in Government because they have been taught by those same individuals who brought us to this point. Look at the faculty at Harvard. It's full of politicians who didn't get re-elected and former senior management types. Not many fresh ideas or honest dissection of previous mistakes emanating from THAT body.

On topic: VA exists because of big bucks and political power. It will continue to exist because of big bucks and political power.

AA/BA No Way? I say eventually it will happen for the same reason.

TC
 

AA717driver

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Good post TC....

Thanks.

Are the ALPA groups in Skyteam and Star working with their counterparts to prevent management whipsawing and strike breaking using alliance pilots?

I've been urging APA to do so with BALPA and SEPLA-IB because we all know what's coming down the road.

TC
 

Rez O. Lewshun

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Thanks.

Are the ALPA groups in Skyteam and Star working with their counterparts to prevent management whipsawing and strike breaking using alliance pilots?

I've been urging APA to do so with BALPA and SEPLA-IB because we all know what's coming down the road.

TC


Yes. But understand, as you know, while the market place is global, laws are local. It is very difficult.

please see...

http://www.itfglobal.org/civil-aviation/alliances.cfm


also, although not directly related...

http://transportation.house.gov/subcommittees/aviation.aspx

http://www.eurunion.org/eu/index.php?option=com_content&task=view&id=2936&Itemid=26

http://www.ttd.org/

http://www.ifalpa.org/

These websites are a little bit better than the FI experts.... :)
 
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Rez O. Lewshun

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Pilots the World Over Oppose Outsourcing Jobs


Pilots from around the world are voicing their staunch opposition to the recently announced joint venture between United Airlines and Aer Lingus that will not use United or Aer Lingus crews on new Aer Lingus flights between Washington, D.C., and Madrid, Spain.
“The pilots of United and Aer Lingus have made enormous sacrifices throughout their careers to help their companies succeed to the point where they can expand international routes,” said Capt. Paul Rice, ALPA First Vice President and Deputy President of the International Federation of Airline Pilots’ Associations (IFALPA). “It is an outrage that the same pilots who helped these companies prosper are being denied their right to fly these new routes.”



The flights are scheduled to begin in April 2010, and the companies plan to add service to additional cities in 2011. In 2012, the airlines intend to create a new jointly-owned European carrier to take over these employees and services.
Representatives of Irish ALPA, ALPA-I, Sindicato Español de Pilotos de Lineas Aéreas (SEPLA), and the European Cockpit Association (ECA) met in New Zealand during the 64th IFALPA Conference. At the conference, the pilots shared information and discussed a common strategy to best protect the interests of the various parties’ constituents. Pilots attending the conference were unified in supporting their brothers and sisters at United and Aer Lingus in standing up to this blatant act of union-busting by the managements of both airlines.


“The proposed agreement between United Airlines and Aer Lingus has far-reaching implications for all pilots and airline employees around the world,” said Capt. Steve Wallach, United MEC chairman, speaking to an international group of pilots at the North American Regional meeting at the IFALPA conference.
“This is yet another attack on our wages and working conditions, and it must be stopped,” continued Wallach. “The outsourcing ‘race to the bottom’ must not be allowed to continue unabated. In the U.S., at least, airline managements appear to have not yet grasped the fact that the political landscape has changed. No longer can they routinely expect approval of corporate schemes that punish workers.”



http://www.alpa.org/DesktopModules/...px?itemid=18395&ModuleId=15680&Tabid=256#jump
 

clippyrip

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......

Rez O. Lewshun

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I don't see how he can argue antitrust violation if there are three alliances. That in and of itself is competition. Unless the three alliances chose to not serve the same communities I don't see how a legitimate investigation could possibly argue that antitrust is being violated.


You are correct as I understand Oberstars comments..

oneworld has London/GB
Skyteam has Paris/AMS
and Star has FRA and central Europe...

There is very little competition....

For pilot labor, though the problem is a matter of whipsaw between the EU pilots and US pilots and as the Irish and United pilots are seeing... outsourced labor using an Alliances resources, such as marketing, routes, aircraft, etc....
 
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