Friday, January 8, 2010

Virgin is American, So Says DOT

After months of unedifying back-and-forths between Alaska Airlines and Virgin America concerning the latter's ownership profile, the U.S. Department of Transportation announced today that Virgin America meets the statutory citizenship requirements to provide domestic air transport service.  See Press Release, U.S. DOT, Virgin America Remains U.S. Citizen, DOT Finds, DOT 3-10 (Jan. 8, 2010) (available here).  From the press release:

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.

. . .

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.

Earlier blog discussions of the Virgin America citizenship proceeding can be found here, here, here, and here.  The decision dismissing the proceedings are available in Order 2010-1-5, Dkt. No. DOT-OST-2005-23307 (Jan. 8, 2010) (available here).

http://lawprofessors.typepad.com/aviation/2010/01/virgin-is-american-so-says-dot.html

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