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Virgin America

DOT is "comfortable" with Virgin America's ownership

Aug 12, 2009

The U.S. Department of Transportation has assured Virgin America Inc. that the airline’s ownership structure is compliant with U.S. law, the CEO said in a news report.

David Cush told Dow Jones Newswires: “We’ve still got the same ownership,” adding that, in private talks with Virgin America, the DOT has said “it is comfortable with our situation.”

The Burlingame-based airline has been dogged by ownership questions since it started business in 2007.

The company is 25 percent-owned by British founder Richard Branson, head of Virgin Group Ltd. in the U.K. Under U.S. law, 75 percent of voting stock must be held by U.S. citizens.

Virgin America has maintained that it has always been in compliance with U.S. “citizenship” laws. It has said it is 75 percent owned by U.S. private equity firms Cyrus Capital Partners LP and Black Canyon Capital LLC.

But that has not stopped rivals like Alaska Air Group Inc. from calling Virgin America’s ownership into question and asking the DOT to investigate.

The DOT, which has been probing Virgin America’s structure, has not issued a public statement regarding the company. A DOT spokesman on Wednesday said, “We’re still reviewing documents (Virgin America) provided us.”

Virgin America said this week it will expand direct service to Fort Lauderdale, Fla. from San Francisco and Los Angeles starting in November. The airline serves nine cities currently, including San Francisco, New York, Washington, D.C. and Boston.

DOT is "comfortable" with Virgin America's ownership
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