Alaska calls on DoT to address Virgin America's compliance with foreign ownership laws
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Alaska Airlines again called (12-Mar-09) on the US Department of Transportation (DoT) to address questions about Virgin America's compliance with US foreign ownership and control restrictions on domestic carriers.
In a filing, Alaska asked DoT to promptly issue an order tentatively finding that Virgin America no longer qualifies as a US carrier. This filing followed a petition to DoT in February asking the department to initiate a public investigation.
Federal law requires US-based air carriers to be US "citizens." To qualify, the outstanding voting interests of the air carrier must be at least 75% owned by US citizens and the carrier must also be effectively controlled by US citizens.
In its filing, Alaska Airlines cited a 09-Mar all Street Journal story reporting that US-based investors in Virgin America had exercised their rights to sell back their almost 77% of the startup carrier's capital to the London-based Virgin Group, according to people familiar with the situation. In the story, Virgin America refused to say whether there had been such a transaction. No new US investors have committed to buying stakes, according to people familiar with the situation, which could make Virgin America essentially wholly owned by the Virgin Group.
General counsel for Alaska Airlines, Keith Loveless said, "This latest newspaper report underscores the urgent need for rigorous and transparent action to address Virgin's apparent violation of foreign ownership and control restrictions. Alaska makes this request to ensure all airlines are held to the same standard of compliance with US law, and we hope the DoT acts quickly to address the issues surrounding Virgin's equity ownership and actual control."
Virgin America's compliance with US citizenship requirements was a point of controversy and debate during its certification proceeding. DoT initially determined that Virgin America, which was founded by the British Virgin Group, did not comply and required the company to restructure before granting initial certification.
(c) Centre for Asia Pacific Aviation. Date posted: 13-Mar-09
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Alaska calls on DoT to address Virgin America's compliance with foreign ownership laws 
