JumpJetter
Basking in LUV!
- Joined
- Nov 25, 2001
- Posts
- 356
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.
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.
