DOT clears Virgin America for take off
The U.S. Department of Transportation on Friday granted final approval for Virgin America to start operations after the low-fare airline made concessions to satisfy initial citizenship fears.
To be licensed as a U.S. airline under the Federal Aviation Act, a company must show that it is actually controlled by U.S. citizens, that the president and two-thirds of the board of directors are U.S. citizens, and that at least 75 percent of the voting interest is owned and controlled by U.S. citizens.
Following the DOT's assertion at the end of last year that the airline failed the citizenship test Virgin America submitted a revised application which includes:
* Providing advance notice to the DOT should the carrier receive additional financing from non-U.S. investors.
* Removing the Virgin Group's veto power over certain contracts and
* Amending loan agreements with the Virgin Group.
* Limit the tenure of Chief Executive Officer Fred Reid for six months following airline certification.
* Restructuring its board of directors to reduce the number of foreign representatives.
* Revising its trademark license to ensure the U.S. carrier can operate independently of U.K.-based Virgin Atlantic.
'It's tough to think of a company that has done as much to meet our standards for becoming a commercial airline,' said U.S. Transportation Secretary Mary E. Peters. 'Anyone who has doubts about the future of commercial aviation in this country should take a close look at one company's efforts to compete.'
Virgin America plans a mid-summer launch with its first flights to be between its home base in San Francisco to New York's JFK International Airport. The airline also plans to serve Los Angeles, Washington/Dulles, San Diego and Las Vegas within its first year of operation.