Virgin America citizenship...

[front9]

By Ann Keeton
Of DOW JONES NEWSWIRES January 8, 2009


U.S. regulators are expected to announce a final ruling on the controversial ownership of Virgin America as early as Friday, according to a person familiar with the situation.

The Department of Transportation has been reviewing the airline's ownership following a restructuring and allegations that it breached a law requiring 75% be controlled by U.S. citizens.

The department is expected to brief U.S. lawmakers on its findings later Friday, according to the person.

Virgin America and the Transportation Department weren't immediately available for comment. The airline, which had hoped to have a decision by the end of 2009, has maintained it meets all ownership requirements after its capital restructuring.

It's launch was delayed by more than two years as rival carriers questioned whether it met the ownership criteria. Concerns were raised again earlier this year when one of its founding investors exercised a put option.

Virgin America, which expects to move into profit this year, said it has sourced new investors that meet the cap on overseas holdings.

Alaska Air Group Inc. (ALK) has led the critics, calling for a public review of Virgin America's ownership. The airline was not immediately available for comment.

 

[Pogue Mahone]

http://aviationblog.dallasnews.com/

DOT says Virgin America is American enough


11:11 AM Fri, Jan 08, 2010 | Permalink
Terry Maxon/Reporter Bio | E-mail | News tips Alaska Airlines pushed the U.S. Department of Transportation last year to reexamine whether Virgin America met U.S. ownership and control rules. On Friday, DOT said that Virgin America did indeed comply with federal law.
In doing so, DOT dismissed Alaska's petition as well as one from the Aircraft Mechanics Fraternal Association for a public inquiry about whether the Virgin Group and Richard Branson exerted too much control over the San Francisco-based carrier.
While Transportation officials said Virgin America was okay, "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 in its announcement.
"These changes include, among other things, provisions to ensure that new investments of capital from entities other than the Virgin Group - a collection of the United Kingdom companies and/or citizens that own 25 percent of the air carrier's stock - can and will be obtained," DOT said.
"Virgin America also will add an additional U.S. citizen to its board, resulting in seven U.S. citizen investor designees as voting members on the nine-member board."
Virgin America quickly praised the DOT's decision. Said president and CEO David Cush:

"Today is a great day for airline competition, for our traveling guests and for our teammates. 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."
​

Virgin America also outlined what it had done in response to DOT requirements.

The proposed new ownership structure will reflect a change among Virgin America's U.S. investors and also allow the Company's teammates to participate in the airline's future via an Employee LLC. Under the new structure, the airline's voting stock will remain in its previous configuration with 75 percent held by the U.S.-based VAI Partners, LLC and 25 percent held by Virgin Group. However, the U.S. investors comprising VAI Partners will change with the following entities now comprising the VAI stake: • Cyrus Aviation Investor, LLC - 55.5 percent
• VAI MBO Investors, LLC--27.8 percent
• VX Employee Holdings, LLC--16.7 percent
• VAI Management, LLC--less than 1 percent
Cyrus Aviation Investor, LLC is an entity related to long-time Virgin America investor, Cyrus Capital. Under the new structure it will substantially increase its investment to become the airline's principal U.S. investor.
VAI MBO Investors, LLC is comprised of five individual investors. Four of the investors, Don Carty [former American Airlines chairman and CEO], Sam Skinner [former DOT secretary], Cyrus Freidheim [former president and CEO of president and chief executive the Sun-Times Media Group, and David Cush, are current Virgin America Board members, and a fifth, Robert Nickell, will assume a Board seat at the closing of this transaction.
VX Employee Holdings, LLC is an entity established to hold the economic value of 16.7 percent of VAI for distribution to the employees of Virgin America at the time of a qualified liquidity event, such as an initial public offering.
​

Virgin America intends to borrow $68.4 million in unsecured debt from shareholders.
"This facility will further improve the liquidity of the company, positioning it for additional growth in 2010 and beyond," the carrier said.


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The entry "DOT says Virgin America is American enough" is tagged: Aircraft Mechanics Fraternal Association , airlines , Alaska Airlines , AMFA , Cyrus Freidheim , David Cush , Don Carty , Richard Branson , Sam Skinner , the Virgin Group , U.S. Department of Transportation , Virgin America

 

[mvedepo]

DOT 3-10
Friday, January 8, 2010
Contact: Bill Mosley
Tel.: (202) 366-4570

Virgin America Remains a U.S. Citizen, DOT Finds​

The U.S. Department of Transportation (DOT) today announced that after conducting a thorough review it has found that Virgin America remains a U.S. citizen and remains under the actual control of U.S. citizens. Under U.S. law, only airlines that meet the standards for U.S. citizenship may hold authority to operate as a U.S. airline
DOT originally certified the airline’s citizenship status in August 2007. The air carrier later notified the Department of a significant potential shift in its shareholder makeup. As a result, DOT launched a review into whether the air carrier would continue to meet U.S. citizen requirements.
To meet the necessary standards, at least 75 percent of an air carrier’s voting stock must be owned or controlled by U.S. citizens, the president and at least two-thirds of the board of directors and managing officers must be U.S. citizens, and the air carrier must be under the actual control of U.S. citizens. DOT examines a variety of factors to determine “actual control” based on the totality of circumstances in each case.

Following discussions between DOT and the air carrier, 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. These changes include, among other things, provisions to ensure that new investments of capital from entities other than the Virgin Group – a collection of the United Kingdom companies and/or citizens that own 25 percent of the air carrier’s stock – can and will be obtained. Virgin America also will add an additional U.S. citizen to its board, resulting in seven U.S. citizen investor designees as voting members on the nine-member board.
DOT today also dismissed petitions by Alaska Airlines and the Aircraft Mechanics Fraternal Association for a public inquiry into Virgin America’s citizenship.
DOT’s letter to Virgin America may be obtained on the Internet at http://ostpxweb.dot.gov/aviation. DOT’s order dismissing the petitions may be obtained on the Internet at http://[URL="http://www.regulations.gov/"]www.regulations.gov[/URL], Dockets DOT-OST-2009-0037 and DOT-OST-2009-0047.
# # #

 

[front9]

 

[mvedepo]

Virgin America Announces Service to Anchorage.

Posted on January 8, 2010

Virgin America announced it will expand its service to Anchorage beginning June 1, 2010. Nonstop flights will be available from Seattle and connecting flights from various cities currently served. One-way fares from San Francisco, L.A., and Seattle will start at $29.
Notably absent from Virgin's expansion is service from Boston, New York City, or Washington D.C., but that suits Virgin America just fine. In an email, Virgin spokeswoman Abby Lunardi professes, "We're pleased with our long-haul, West Coast-based model at present," and says Virgin has no plans to enter the highly competitive East Coast market any time soon.
And with Southwest's recent jump into New York City and Boston, and corresponding moves from JetBlue to protect its turf, that may not be a bad idea. The West Coast is a somewhat more open market than the East, meaning Virgin America can add routes, such as Seattle to Anchorage, where there is little or no competition. And during a serious economic downturn, that kind of opportunistic expansion is likely the only sensible way a small, young airline can grow.
Still, for those of us in the Northeast eager for another option, it's a bit disappointing to see the West Coast get the goods. And with Virgin's apparent commitment to a West-Coast-centric route map, it may be a while before the airline broadens service from the Northeast.

 

[xanderman]

Virgin America Announces Service to Anchorage.

Posted on January 8, 2010

Virgin America announced it will expand its service to Anchorage beginning June 1, 2010. Nonstop flights will be available from Seattle and connecting flights from various cities currently served. One-way fares from San Francisco, L.A., and Seattle will start at $29.
Notably absent from Virgin's expansion is service from Boston, New York City, or Washington D.C., but that suits Virgin America just fine. In an email, Virgin spokeswoman Abby Lunardi professes, "We're pleased with our long-haul, West Coast-based model at present," and says Virgin has no plans to enter the highly competitive East Coast market any time soon.
And with Southwest's recent jump into New York City and Boston, and corresponding moves from JetBlue to protect its turf, that may not be a bad idea. The West Coast is a somewhat more open market than the East, meaning Virgin America can add routes, such as Seattle to Anchorage, where there is little or no competition. And during a serious economic downturn, that kind of opportunistic expansion is likely the only sensible way a small, young airline can grow.
Still, for those of us in the Northeast eager for another option, it's a bit disappointing to see the West Coast get the goods. And with Virgin's apparent commitment to a West-Coast-centric route map, it may be a while before the airline broadens service from the Northeast.

Ha Ha Ha! Nice poke in the eye of the AS guys... I'm all for it though. I'd love to see the real link to this story... AS needs the competition!

 

[freightrash]

AS <- HATE -> VA
F9/YX <-HATE-> FL <-HATE-> WN

it's bad new for RAH haters that RAH's Dec. traffic results pretty impressive.

 

[Mea25000]

The only guys at AS that hate VA are the old selfish crusty ones and they hate everyone. I wish everyone at VA the best. I think its great they now own 17 percent of the company and hope they get some nice raises over the next few years. They have a great product and everyone seems to be pretty happy over there. I just hope if they put us out of business someone over there will help me get a job. I would really like to stay on the west coast!

 

[mvedepo]

The only guys at AS that hate VA are the old selfish crusty ones and they hate everyone. I wish everyone at VA the best. I think its great they now own 17 percent of the company and hope they get some nice raises over the next few years. They have a great product and everyone seems to be pretty happy over there. I just hope if they put us out of business someone over there will help me get a job. I would really like to stay on the west coast!

I hear ya. I have had a lot of Alaska guys on the jumpseat. All have been fantastic. Every company has their bad eggs.

 

[Ralph Cramden]

The only guys at AS that hate VA are the old selfish crusty ones and they hate everyone. I wish everyone at VA the best. I think its great they now own 17 percent of the company and hope they get some nice raises over the next few years. They have a great product and everyone seems to be pretty happy over there. I just hope if they put us out of business someone over there will help me get a job. I would really like to stay on the west coast!

Thanks for the kind words, and welcome aboard anytime.

I don't think you are in any danger of being put out of business by us, but your management team has been putting you under single handed. It is a shame to see this happen to such a proud airline.