Tuesday, September 8, 2009

Virgin America Responds to Alaska Airlines

A new, but not particularly surprising, chapter is unfolding in the ongoing regulatory saga over the nature of Virgin America's citizenship profile.  See earlier blog posts chronicling this adventure in administrative oversight here, here, and here.  In response to Alaska Airlines's renewed petition for the Department of Transportation to investigate Virgin America's ownership and take action to ground the carrier if it fails to meet domestic ownership criteria, see Renewed Motion of Alaska Airlines, Inc. for a Public Proceeding, Dkt. No. OST-2009-0037 (Aug. 21, 2009), Virgin is asking the agency to drop the inquiry altogether.  See Answer of Virgin America Inc. to Renewed Motion of Alaska Airlines, Inc., Dkt. No. OST-2009-0037 (Sept. 1, 2009).  According to Virgin America:

Alaska's renewed motion should be recognized and dismissed for what it is: political and public posturing designed to do nothing more than make a headline and attempt to harm a new competitor that has won numerous awards for its innovative and industry-leading service and product.  Indeed, given the lack of any new or substantive issues raised by Alaska or others, Virgin America respectfully requests that the Department close the docket on this matter and deny Alaska's multiple petitions.

Id. at 3.

It appears, from both Alaska's renewed petition and Virgin's reply, that much of their quarrel has to do with the nature of the proceeding itself.  Alaska is demanding transparency in the form of a full public inquiry whereas Virgin remains steadfast that such an inquiry is unwarranted in the present case and that there is no DOT precedent to support it.  See id. at 3-4.  As has been the case from the onset of this dispute, Virgin America insists that it meets the statutory requirement that at least 75% of its voting equity is owned and controlled by U.S. citizens.  See 49 U.S.C. § 40102(a)(15). 


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