Virgin America is mounting a major campaign to win regulatory approval and support from the flying public.
The carrier, partly funded by Richard Branson's Virgin group, plans a website (www.letVAfly.com), television spots and public appearances to win public support. But preliminary findings from the US Department of Transportation show that Virgin America's ownership structure violates long-standing limits on control of and investment in carriers by foreign citizens. The proposed start-up waited more than a year for government clearance to fly only to be rebuffed in late December.
Citing the "pervasive involvement" of the Virgin Group, the Transportation Department said the licensing of the Virgin brand to a US carrier would "restrict management's independence" and decision making. To appease regulators, Virgin in a mid-January appeal offered to diminish the influence of Branson and sanction further investment from its US owners. Its US investors are also offering to remove "any non-US participation or voting ability in any of their funds".
Virgin executives have opened their books to other possible US investors, including JetBlue. Virgin already has nine Airbus narrowbodies ready and painted and almost 170 employees.
It continues to sign contracts with suppliers, hoping its appeal will result in clearance to start flying in the second or third quarter. The Virgin Group has put up a quarter of the initial $177 million investment and also lent Virgin America some $53 million.
Source: Airline Business
