Top > Business > 2007 > January > 2007-01-09

The United States Hasn`t Approved Virgin America

United States` transportation authorities refused to grant authorization for Virgin America to fly in the country. The authorities reported that the discount airliner, made famous by its flamboyant British billionaire owner, Richard Bronson, doesn`t meet the requirements defined by US law, mainly, it isn`t 3 quarters owned by American citizens. Virgin America announced it intends to replay on January 10, and will illustrate that it indeed qualifies as 75% US owned. Last week the company said it expects its request will be declined. "While we disagree with this tentative order, we respect the department`s decision and intend to use the order as a roadmap to address the issues raised and to demonstrate to the DOT that Virgin America will meet all ownership and control requirements," an airline said.

Virgin America has had opposition from American airliners such as Continental Airlines, which claimed that Virgin Group owns the airline and is in violation of US law. The Department of Transportation stated in its declination that Virgin Group was involved in the founding of Virgin America. In addition, the officials added that the financing provided by Virgin Group to the airliner, a number of financial agreements between the two companies and Virgin Groups ability to influence Virgin America`s board of directors were the main factors in their refusal.

Virgin America ordered 34 Airbus A319 and A320, and has already received 9 of them. Last year announced its plans to operate as an American airliner. The company claims that 25% of the company is owned by Virgin Group and 75% are owned by American investors. While European law allows foreign investment in airliners up to 49%, American law only allows 25% foreign investment.