Virgin America remains a U.S. citizen, DOT finds
08-Jan-2010 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
DOT originally certified the airline's citizenship status in August 2007. The air carrier later notified the Department of a significant potential shift in its shareholder makeup. As a result, DOT launched a review into whether the air carrier would continue to meet U.S. citizen requirements.
To meet the necessary standards, at least 75 percent of an air carrier's voting stock must be owned or controlled by U.S. citizens, the president and at least two-thirds of the board of directors and managing officers must be U.S. citizens, and the air carrier must be under the actual control of U.S. citizens. DOT examines a variety of factors to determine "actual control" based on the totality of circumstances in each case.
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.
DOT today also dismissed petitions by Alaska Airlines and the Aircraft Mechanics Fraternal Association for a public inquiry into Virgin America's citizenship.