Alaska Airlines said it wants a federal investigation of rival Virgin America.
Alaska, a subsidiary of Alaska Air Group Inc. of Seattle, petitioned the U.S. Department of Transportation, asking for a public inquiry as to whether Virgin America, based in Burlingame, meets U.S. foreign ownership and control restrictions on domestic airlines.
Alaska Airlines officials said they want Virgin America to adhere to U.S. rules, which require that the company be three-quarters or more owned by U.S. citizens and “effectively controlled” by U.S. citizens.
“Alaska makes this request to ensure all U.S. carriers are held to the same standard of compliance with U.S. … laws,” said Keith Loveless, general counsel for Alaska Airlines, in a statement.
Virgin America officials said they were in full compliance with U.S. laws.
Virgin America is minority owned by Virgin Group Ltd., the British holding company run by billionaire Richard Branson. Branson’s involvement in Virgin America was a complicating factor when the airline sought its license to operate from the U.S. Department of Transportation. Rival airlines claimed Virgin America would be controlled by Branson, a violation of U.S. law.
Virgin America eventually overcame those objections and was granted its license. The airline, in operation since 2007, is majority owned by U.S. private equity firms Black Canyon Capital LLC and Cyrus Capital Partners.
“This is a meritless petition. We are a U.S. owned and controlled airline that is in full compliance with the law and all Department of Transportation regulations. Nothing has changed in our ownership structure which was approved by the DOT. Should our ownership structure change in the future, we will of course notify the DOT in advance, so they can confirm our continuing compliance,” said Abby Lunardini, director of corporate communications for Virgin America, in a statement.