Virgin America, Inc.

OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

January 8, 2007

Motion for Extension of Time to File its Objection in Response to the Department's Show Cause Order

Virgin America, Inc. respectfully moves for an extension of time of three business days, until January 16, 2007, to file its Objections and response to the Department’s Show Cause Order rendered on December 27, 2006 in the above-captioned matter. Order 2006-12-23.

Virgin America’s application for economic authority has been pending before the Department for over a year, and the Department itself took over 150 days following its certification that Virgin America’s application was “substantially complete” to issue its Show Cause Order.

The Show Cause Order raises a variety of issues regarding the applicant’s citizenship, requiring detailed and thorough responses, which Virgin America intends to submit, fully detailing its compliance with the Department’s citizenship requirements.

Counsel: Pillsbury Wintrhop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

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Served January 10, 2007

Notice Extending Time to File Objection

On January 8, 2007, Virgin America filed a motion requesting that the Department extend the due date for objections to Order 2006-12-23, to January 16, 2007. In support of its request, Virgin America states that the additional time requested would allow the company to submit to the Department detailed and thorough responses describing its full compliance with the variety of issues regarding its citizenship raised in that order. By letter dated January 9, 2007, Virgin America notified the Department that it had polled interested parties and that there were no objections to its request to extend the objection period and that interested parties had also agreed that the date for filing answers to Virgin America’s objection be extended to January 30, 2007.

Under these circumstances, we have determined it appropriate to grant Virgin America the extension it requested and extend the date for interested parties to file answers to the company’s objection. Therefore, on January 9, 2007, we orally advised Virgin America that we were extending the objection period to Order 2006-12-23 to January 16, 2007, and the period for the filing of answers to objections to January 30, 2007. We confirm our oral action herein.

By: Todd Homan

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January 11, 2007

Confidentiality Affidavit of jetBlue - Joanna Geraghty

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January 12, 2007

Confidentiality Affidavit of jetBlue Airways - James Hnat
Confidentiality Affidavit of jetBlue Airways - Robert Land

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Janaury 17, 2007

Objection of Virgin America to Order 2006-12-23 and Motion for Leave to File Additional Evidentiary Material - Bookmarked

Revised Pleading - 233 Pages

Motion for Confidential Treatment

Two days after Christmas 2006, and more than a year after the application was filed, DOT issued an unprecedented order tentatively rejecting the application by Virgin America – a start‑up U.S. domestic air carrier ‑ to introduce new and competitive low‑cost domestic airline service. This service would save U.S. consumers hundreds of millions of dollars annually, while improving immeasurably the conditions under which they presently are forced to travel. DOT tentatively rejected the application to the apparent delight of several of Virgin America's competitors, many of which filed voluminous and unauthorized pleadings in this matter. Others are now expressing newfound interest in serving San Francisco, while recently gaining access to Virgin America's confidential materials on file at the Department.

The result of DOT's delay and its tentative decision has already cost the company tens of millions of dollars and it will cost American consumers, workers, and investors hundreds of millions more in lost opportunities. Virgin America offers American consumers the prospect of low cost, high quality airline service at a time when existing carriers are raising fares, restricting the number of flights, and maintaining largely abysmal service levels.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8898, kenneth.quinn@pillsburylaw.com

January 16, 2007

Confirmation Letter - Filing Extension

This confirms, on behalf of our client, Virgin America, Inc., our oral request today for a one day extension for time to file our Objections to Order 2006-12-23. By Notice dated January 10, 2007, the Department extended the due date for objections until January 16, 2007.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8898, kenneth.quinn@pillsburylaw.com

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Served January 19, 2007

Notice Announcing an Extension of Time to File Answers to Objections to Order 2006-12-23

On January 8, 2007, Virgin America, Inc. filed a motion requesting that the Department extend the due date for objections to Order 2006-12-23, issued December 27, 2006, from January 10 to January 16, 2007. By Notice dated January 10, 2007, we determined it appropriate to grant Virgin America’s request. At the same time, we extended the period for the filing of answers to objections to January 30, 2007.

On January 16, 2007, Virgin America submitted a letter, addressed to the Chief of the Department’s Dockets section, to the effect that it required an extension of time to file its Objections. The applicant stated that the additional time was necessary in order to allow it to provide new and supplementary evidence directly responsive to our tentative decision and Virgin America’s citizenship. This letter does not show any evidence of having been served on the other parties to the proceeding. Two days later, the applicant filed Objections to Order 2006-12-23, accompanied by substantial new evidentiary submissions, under cover of a Motion for Leave to File Additional Evidentiary Material.

Given these circumstances, and in an effort to preserve the integrity of the Department’s procedures and this record, we find it in the public interest to extend the period for the filing of answers to Virgin America’s Objections to February 1, 2007. Moreover, interested parties will also have until that deadline to comment on any outstanding procedural issues.

By: Todd Homan

January 19, 2007

Joint Motion of American Airlines, Delta Air Lines, and US Airways for Suspension of Further Proceedings Pending Submission by Virgin America of Additional Documents

American Airlines, Inc., Delta Air Lines, Inc., and US Airways, Inc. hereby jointly move for suspension of further procedures in this docket pending submission by Virgin America Inc. of additional documents. The Department and interested parties require these documents in order to review and analyze the new application filed by Virgin America on January 17, 2007. Once the record has been deemed complete, interested parties should be allowed at least 21 days to answer Virgin America's new application and its objections to the show-cause order.

On January 17, 2007, Virgin America filed lengthy objections to the show-cause order which describe agreements to make wholesale amendments to the documents underlying its initial application, as well as to make various new agreements, purporting to meet the U.S. citizenship test. These descriptions, but not the documents themselves, appear in the body of the objections and in the affidavit of Frances Farrow, a U.K. citizen, long-time insider with the U.K. Virgin Group, and high-level associate of Sir Richard Branson.

The amendments and new agreements are only summarily described and characterized, contrary to Virgin America's claim to have submitted a "mountain of evidence." But the applicant has failed to provide the record with the executed texts of any of these fundamental documents. The Department cannot evaluate the new application without these documents. Fairness and due process require a meaningful opportunity for interested parties to review and analyze the actual language of the purported amendments and new agreements, just as the parties were able to do in relation to the source documents underlying Virgin America's initial application. Until all of these documents are executed and produced, the Department should suspend further procedures.

If Virgin America expects the Department to consider the new application it filed on January 17, it should produce evidence - in the form of fully executed amendments and new agreements -to support the restructuring claims made in its objections and affidavits. If Virgin America wished to avoid delay in the consideration of its new application, it should have devoted its resources to drafting and executing the actual documents that would purportedly address the citizenship issue, rather than, for example, assembling press clippings, denouncing the Department, and making totally irrelevant claims as to the alleged benefits of its proposed service.

Counsel: Carl Nelson, 202-496-5647, carl.nelson@aa.com for American / Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta / Howard Kass, 202-326-5153, howard@kass@usairways.com for US Airways

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January 23, 2007

Answer of Continental Airlines in Support of Joint Motion

For the reasons stated in the joint motion of American, Delta and US Airways, submitted on January 19, 2007, the Department should suspend further proceedings in this docket until Virgin America produces the amendments, new agreements and other documents relied upon in its January 17, 2007 response to Order 2006-12-23. After those documents are produced and the Department deems the record complete, interested parties should have at least 21 days to answer Virgin America's "new application and objections to the show-cause order," as American, Delta and US Airways recommend.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2500, rbkeiner@crowell.com

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January 24, 2007

Re: Errata to Virgin America's Objections to Order 2006-12-23

Virgin America filed Objections to Order 2006-12-23 and Motion for Leave to File Additional Evidentiary Material on January 18, 2007, in the above- captioned proceeding. Included in the Objections at Exhibit 4 was an affidavit of Cyrus Freidheim. The public version of Exhibit 4 available on the Department's Electronic Management System (at pages 115 through 118 of the Objections) contains a clerical error. Accordingly, enclosed is an errata sheet and copies of the pages containing the correct information. Please note that the confidential version of Exhibit 4 filed with the Department, and provided to opposing parties, is correct.

Counsel: Pillsbury Winthrop, Jonathan Foglia, 202-663-8210

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Served January 26, 2007

Notice Dismissing Motion and Announcing an Extension of Time to File Answers to Objections to Order 2006-12-23

On January 19, 2007, American Airlines. Inc., Delta Air Lines, Inc., and US Airways, Inc. jointly filed a Motion requesting the suspension of further procedures in this case. The Movants argue that Virgin America, Inc. should be required to submit to the docket all amendments and revised agreements that Virgin America has only summarized and characterized in its Objections to Order 2006-12-23, served on December 27, 2006.

On January 22 and January 23, 2007, the Air Line Pilots Association and Continental Airlines. Inc., respectively, filed in support of the Joint Motion.

On January 25, 2007, Virgin America notified the Department that it fully intends to file additional evidentiary materials into the record, among other things, the material noted by the Movants early next week. Given these circumstances, we now find it appropriate to provide interested parties 14 days from the submission of these materials to file answers to Virgin America's Objections. Moreover, interested parties will also have until that deadline to comment on any outstanding procedural issues.

Accordingly, we will dismiss as moot the jointly filed Motion for the suspension of further procedures in this case.

By: Todd Homan

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January 30, 2007

Motion for Leave to File Additional Evidentiary Material

Motion for Confidential Treatment

Virgin America is providing the requested redlined versions of newly revised documents such as its Stockholders Agreement, Bylaws, Subscription Agreement, Interim Note Agreement, Subordinated Note Agreement, Senior Secured Promissory Notes, and Senior Secured Promissory Notes, Series B, Security Agreement, and Trademark License Agreement. In addition, Virgin America also is filing the referenced new Voting Trust Agreement, which will confirm the commitment of the Virgin Group to place its shares with a U.S. citizen trustee, even though its holdings fall well within the voting equity limits allowed by statute. Finally, Virgin America is also providing the Department with a letter agreement signed by Virgin America and each of its Investors evidencing their commitment to be bound by these newly revised agreements.

When combined with the detailed affidavits submitted as part of its Objections, Virgin America's documents truly do amount to overwhelming evidence that demonstrably alters the "totality of the circumstances" and conclusively establishes the validity of its U.S. citizenship.

Counsel: PIllsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

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February 9, 2007

Support of San Antonio International Airport

I am writing to express San Antonio International Airport's strong support for the Department's timely and favorable review of the revised application of Virgin America to become a certified domestic air carrier. We understand that Virgin America has made substantial changes to its ownership, funding and corporate governance agreements to address the Department's concerns and to demonstrate its continuing commitment to fully satisfy each of the issues identified in the Department's Tentative Decision. San Antonio International Airport commends Virgin America for ensuring that it addresses both the spirit and "totality of circumstances" that the Department requires to establish clear US citizen ownership and control.

By: Aviation Director, Mark Webb, 210-207-3450

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February 14, 2007

Public Answer of Air Line Pilots Association in Opposition to the Objections of Virgin America - Bookmarked

Motion for Confidential Treatment

Virgin America has criticized DOT's order to show cause as, inter alia "devoid of careful deliberation," unaccompanied by any serious consideration of Virgin America's evidence and analysis," and departing from the Department's own precedent and policy "without any reasoned explanation." Objections at 4647). The order flatly refutes these protestations. DOT carefully applied the longstanding "totality of the circumstances" test and the Department's conclusions were fully supported by the record in this proceeding. Even if Virgin America were to make all the changes it proposes in its Objections, the real and potential influence of Virgin Group over the applicant remains broad and deep. For the reasons set out above, the Department should make final its tentative determination that Virgin America is not a U.S. citizen for purposes of the aviation statutes and should deny Virgin America's application.

Counsel: ALPA, Russell Bailey, 202-797-4086, russell.bailey@alpa.org

February 13, 2007

Answer of American Airlines to New Application - Public Version - Bookmarked

Motion for Confidential Treatment

The fundamental question presented is this, Can Virgin America lawfully be deemed a United States citizen in accordance with the statute where Sir Richard Branson and the Virgin Group (1) conceived, designed, and funded the company, (2) not only authored the business plan but also executed scores of contracts with vendors and suppliers that remain in effect, (3) recruited and hired key personnel under long-term employment contracts, (4) restricted the company's scope of operations through a 30-year trademark license agreement, (5) provided $233.3 million in capital while purported U.S. citizen investors have to date paid in only $10 million, and (6) those investors (which include a number of Cayman Islands entities) claim to be U.S. "owners" even though they are protected from risk of loss in the first year of operations by Put agreements obligating the Virgin Group to buy back their shares with 8% interest?

Based on the statutory numerical test and in the totality of the circumstances presented, the answer is clearly no, as the Department correctly found in Order 2006-12-23 and should now affirm. The decision is not even close, notwithstanding Virgin America's various proposals to restructure that it submitted after the show-cause order was issued.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

February 13, 2007

Answer of Delta Air Lines - Public Version - Bookmarked

Motion for Confidential Treatment

The Department should not be swayed to ignore the dictates of the Aviation Code and longstanding Department precedent by Virgin's irrelevant tirade against the opposing parties in this proceeding or its claims of alleged public benefits that might result from its proposed service. For starters, the Department's Show Cause Order vindicated the opponents, demonstrating that their positions were valid and well-founded. Moreover, this case is not about new entry, rather it is about the transparent efforts of a U.K. citizen to circumvent U.S. law and one of the most restrictive U.S. bilateral agreements to establish a U.S. carrier that is owned and controlled by foreign interests.

Counsel: Delta and Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

February 14, 2007

Public Answer in Opposition of US Airways Group - Bookmarked

Motion for Confidential Treatment

VA's lengthy objections to the Show-Cause Order and subsequent submissions are long on rhetoric and criticism of the Department's staff, but provide no new information or arguments warranting revision of the Department's tentative conclusions. Similarly, while VA's pleadings claim that the applicant has rectified the myriad of ownership and control issues found by the Department, the actual confidential material submitted by VA since the Department issued the Show-Cause Order contradicts those claims. The Department has two alternatives at this point: deny or dismiss VA's application, as there is simply no basis for granting VA the requested certificate authority since VA has not demonstrated, and cannot demonstrate, that it is a U.S. citizen under the applicable statutes.

Counsel: US Airways, Howard Kass, 202-326-5153, howard_kass@usairways.com

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February 14, 2007

Motion of Virgin America for Leave to File Additional Evidentiary Material

Virgin America has obtained a new $20 million loan from Cyrus Capital Partners, LP, the proceeds of which will be available to Virgin America after DOT approval of its application and after the Company's Second Closing when the U.S. investors will add $78 million dollars in additional equity to the company's capital structure. Virgin America hereby submits with this motion loan documents comprised of a loan commitment letter from Cyrus Capital and loan term sheet.

U.S. investors have made an additional equity investment of $10 million in Virgin America. Specifically, in addition to the new loan facility detailed above, the U.S. investors have agreed to contribute another $10 million in capital in return for additional voting equity. This additional equity will not be subject to the put agreement previously agreed to by the parties. Virgin America submits with this motion a term sheet reflecting an agreement for an additional equity investment by Cyrus Capital of $7.5 million and Black Canyon of $2.5 million, for a total of $10 million. Together, the new $20 million loan from Cyrus Capital and the additional $10 million equity investment by Cyrus Capital and Black Canyon constitute an additional $30 million in funding from U.S. citizens. This new funding, in addition to the considerable investment by U.S. citizens that has already been agreed to, demonstrates clear ownership and further incentive for U.S. citizens to actively control Virgin America.

On February 1, 2007, the U.S. citizen controlled Board of Directors of Virgin America: 1) appointed former Secretary of Transportation Samuel K. Skinner to the position of Vice Chairman of the Board; and 2) reappointed the corporate officers of Virgin America. Non‑U.S. citizen Board members recused themselves from both of these actions. In support, Virgin America attaches to this motion a duly executed officer certificate confirming these actions.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000

February 15, 2007

Motion of Virgin America for Confidential Treatment Under Rule 12

The documents for which confidential treatment is sought are comprised of the following: a loan term sheet, a loan commitment letter from the lender, and a term sheet for additional voting equity agreed upon between Virgin America and investors.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000

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Served February 20, 2007

Notice Announcing an Extension of Time to File Answers to Objections to Order 2006-12-23

On February 14, 2007, Virgin America, Inc. filed Motions requesting confidential treatment of certain additional evidentiary material and for leave to file this material out of time, supporting its request for a certificate of public convenience and necessity under 49 U.S.C. § 41102 to engage in interstate scheduled air transportation. We will grant Virgin America's request to file out of time and we will address its request for confidential treatment by separate action.

(See Order 2006-12-23, issued December 27, 2006, in which the Department tentatively concluded that Virgin America is not a U.S. citizen as defined in 49 U.S.C. § 40102(a)(15) and proposed to deny its application for interstate scheduled air transportation of persons, property, and mail under 49 U.S.C. § 41102. Virgin America filed its Objections to our tentative decision on January 18, 2007, and filed supplementary material on January 30. Answers to Objections have been filed.)

Given the circumstances in this case, and in an effort to have a complete record for decision, we find it in the public interest to provide interested parties an additional seven business days from the service date of this Notice to file answers, addressing this new material.

Persons entitled to petition the Department for review of this notice under the Department's Regulations, 14 CFR 385.30, should file their petitions within 10 days of the service date of this order.

By: Todd Homan

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Austin-Bergstrom International Airport Letter in Support

Bay Area Business Coalition Letter in Support

Jacksonville Aviation Authority Letter in Suport

Lambert-St. Louis International Airport Letter in Support

Palm Beach International Airport Letter in Support

Salt Lake City Department of Airports Letter in Support

Southwest Florida International Airport Letter in Support

Tampa International Airport Letter in Support

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March 1, 2007

Answer of American Airlines to New Evidentiary Material of Virgin America

Motion of American Airlnes for Confidential Treatment Under 14 CFR 302.12

Hereby answers the new evidentiary material submitted on February 14, 2007 by Virgin America. The new material is but the latest in a con-tinuous stream of pleadings and amendments by Virgin America attempting to dress up its bid to become a U.S. air carrier.

Notwithstanding Virgin America's latest effort, it remains a non‑U.S. citizen. Virgin America continues to fail the statutory numerical test that at least 75% of its equity must be owned by U.S. citizens, and Virgin America continues to be under the actual control of Sir Richard Branson and the Virgin Group based on the totality of the circumstances.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

March 1, 2007

Answer of Delta Air Lines

Motion of Delta Air Lines for Confidential Treatment

The foreign ownership interests, the Board representation, the trademark license, the development, business plan, and creation of the airline, and the substantial and ongoing financing investments, among others, all show a direct convergence to a foreign citizen - the Virgin Group. Virgin is, and remains under the "actual control" of, a foreign citizen and the record clearly shows that there is the "potential [for foreign citizens] to exercise substantial influence over the carrier," Nothing in these latest materials changes that reality. Accordingly, the Department should finalize its Show Cause Order denying Virgin's certificate application.

Counsel: Delta and Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

March 1, 2007

Answer of US Airways to Additional Documents Submitted by Virgin America

Motion of US Airways for Confidential Treatment

The following answer sets forth the position of US Airways Group, Inc. to the motion and additional evidentiary material filed by Virgin America on February 14, 2007. As shown below, none of the hedge fund investors' proposed new $10 million equity investment in VA, the previously‑announced $20 million loan to VA by Cyrus Capital, or the VA board resolution rubber‑stamping officer appointments made by the Virgin Group, either individually or collectively resolve the foreign ownership and control concerns identified by the Department, or the concerns described in the answers to VA's objections that were filed by US Airways and other interested parties prior to VA's latest submission. Accordingly, the Department should deny or dismiss VA's Application for a Certificate of Public Convenience and Necessity to engage in interstate scheduled air transportation.

Counsel: US Airways, Howard Kass, 202-326-5153, howard_kass@usairways.com

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Letters in Support of:

• County of San Mateo, CA

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March 7, 2007

Email Message - Association of Flight Attendants-CWA in Opposition to Virgin America

NOTE: This Email is representative of several hundreds of communications that the Department is now receiving concerning the case pending in Docket OST-2005-23307. Interested parties wanting access to these communications may contact Bill Bertram, Chief, Air Carrier Fitness Division.

Virgin America claims to be a new generation airline but is nothing more than a direct extension of the Virgin Group, which is owned and operated by foreign interests. Virgin's business plan simply duplicates U.S. domestic routes between large cites that are currently served by a healthy mix of U.S. domestic low-fare airlines and large network carriers that offer point-to-point service and extensive international connections. Should the DOT approve their application, Virgin America could displace thousands of good paying U.S. jobs and offer no real new service to U.S. consumers.

I believe that the Virgin Group is trying to circumvent U.S. aviation law with its application. The debate on changing aviation law appropriately belongs in the U.S. House and Senate and not through a DOT application. Foreign interests could not convince congress earlier to change ownership and investment laws and now are employing a different strategy.

I urge you to uphold U.S. aviation laws, protect American jobs and deny Virgin America's application.

By: Alessandra Macauley

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March 14, 2007

Motion for Leave to File and Final Reply to the Remaining Objections of Opposing Parties

Motion for Confidential Treatment

While American, Delta, US Airways, and ALPA continue their protectionist tirade to prevent the launch of Virgin America, they have largely ignored Virgin America’s sweeping financial, managerial, contractual, and structural changes.

The record here is now complete and ripe for action because once concerns were raised in the Department’s Tentative Decision, Virgin America and its investors went above and beyond statutory and regulatory requirements to conclusively demonstrate not only that the application meets the statutory ownership requirement, but that it is under the control of U.S. citizens. To their credit, certain legacy carriers like United, Northwest, and now even Continental, have fallen silent in their opposition in the docket and have apparently decided to compete in the marketplace, not governmental corridors. Notably, no low cost carrier has filed in opposition to Virgin America’s application. Additionally, over 71,000 letters in support of Virgin America’s application have been submitted to the White House, the DOT, Members of Congress, and governors around the country.

Virgin America respectfully requests that the Department issue forthwith a Final Order approving its application for a certificate of public convenience and necessity to engage in interstate scheduled air transportation.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

March 14, 2007

Information on Board of Directors Vice-Chairman

On behalf of Virgin America, Inc., we are submitting information on Secretary Samuel K. Skinner, the Vice-Chairman of the Board of Directors of Virgin America, as required under 14 C.F.R. 204. Secretary Skinner’s appointment was approved by the Board of Directors on February 1, 2007. Virgin America’s submission of information on Secretary Skinner does not alter the compliance information provided in sections (l), (m), (o), (p), and (q) of Exhibit 1 to its December 8, 2005 Application for a Certificate of Public Convenience and Necessity.

Included with this letter is brief biographical information on Secretary Skinner along with a copy of his resume. We have provided a copy of this letter and the attachments to the opposing parties.

Counsel: Pillsbury Winthrop, Jennifer Trock, 202-663-9179, jennifer.trock@pillsburylaw.com

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Order 2007-3-16
OST-2005-23307

Issued and Served March 20, 2007

Order to Show Cause | Word

By Order 2006-12-13, issued December 27, 2006, the Department tentatively found that the applicant, Virgin America, Inc. had failed to establish that it was a U.S. citizen and that it would be owned by and remain under the actual control of U.S. citizens.  In response to that finding, Virgin America filed a substantially revised application proposing material changes in its financial arrangements, its management, and its corporate governance.  Although our decisions on air carrier fitness look at the “totality of the circumstances” surrounding the applicant, and not any single factor, it is quite apparent from the record that Virgin America has either made or offered to make fundamental and highly constructive changes in its application.  These modifications, when complemented by certain additional conditions we propose to include, now support a tentative finding that the applicant can meet our stringent tests for citizenship.

Our review shows, however, there do remain a few areas where the revised application, as proposed by Virgin America, still falls short of the rigorous standards we apply in determining whether U.S. interests have “actual control” of the airline.  Therefore, we are proposing to stipulate further conditions that the applicant must accept (or persuade us not to require) before making its certificate authority effective.

Based on our review of the amended record of this case we now tentatively find that Virgin America will be a citizen of the United States, will be fit, willing, and able to provide interstate scheduled air transportation of persons, property, and mail, and should be issued a certificate of public convenience and necessity authorizing such operations, subject to conditions.

As is our normal practice, we will provide interested parties 21 days to comment on our tentative findings and conclusions here.

By: Andrew Steinberg

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March 21, 2007

American Airlines Does Not Intend to File Objections

American Airlines does not intend to file objections to show-cause Order 2007-3-16, March 20, 2007, tentatively granting the application of Virgin America for a certificate of public convenience and necessity.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

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April 10, 2007

Motion for Confidential Treatment

Virgin America, Inc. hereby files this Motion for Confidential Treatment for portions of its Comments to the Department's Order to Show Cause (March 20, 2007) in the above-captioned matter, which is attached hereto in a sealed envelope and marked in accordance with Rule 12.

Virgin America's Comments include sensitive business and financial information relevant to the Department's review of VX's Application. Public disclosure of this information would cause substantial harm to VX's competitive position by disclosing details of these otherwise-confidential arrangements.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

April 10, 2007

Comments of Virgin America - Bookmarked

Virgin America, Inc. welcomes the Department's tentative approval of its application for a certificate of public convenience and necessity in its Order to Show Cause dated March 20, 2007 and respectfully urges the Department to proceed to issuance of a Final Order granting its application at the earliest possible time. Virgin America respectfully submits that the record before the Department abundantly demonstrates that it meets the Department's most "stringent tests for citizenship," and establishes that it is "fit, willing, and able" to perform interstate air transportation.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

April 10, 2007

Association of Flight Attendants Intends to File Comments | Word

The Association of Flight Attendants-CWA plans on filing objections to Department of Transportation Order 2007-3-16.  AFA-CWA intends to file objections 7 business days from today.

By: AFA-CWA, Christopher Witkowski, 202-434-0596

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April 11, 2007

Motion of Virgin America to Strike or Otherwise Preclude Consideration of Letter and Any Subsequent Objections of The Association of Flight Attendants-CWA

The AFA through its letter seeks to delay a final decision in a proceeding that has been before the Department for more than 15 months. As the Department stated in its Order, "If no substantive objections are filed, we will issue an order that will make final our tentative finding and conclusion with respect to Virgin America's fitness and certification." AFA has failed to file any objections within the deadline, and the Department should accordingly strike the letter, as well as any objections that AFA may attempt to file at a later date, particularly if styled as an "Answer" or as 'Objections' to the Order issued on March 20, 2007.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

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April 16, 2007

Confidentiality Affidavits of Association of Flight Attendants-CWA

• Christopher Witkowski
• Susan Jollie

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OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

April 19, 2007

Answer of the Association of Flight Attendants-CWA

Contingent Motion of Association of Flight Attendants-CWA for Leave to File an Unauthorized Document

There is absolutely no evidence in the record about how an independent U.S. carrier applicant may have structured its operations, because no such entity ever existed. The decisions have been made for Virgin America by the Virgin Group. The managers acting for the prohibited foreign interests may well have made very good commercial decisions. Undoubtedly, that is what the passive U.S. investors that the Virgin Group recruited believe to be true. The Virgin Group business plan - the licensing agreement, the code-share agreement, all the commercial transactions --are still in place even if a few of their terms have undergone minor revision.

The affairs of Virgin America are still structured so the carrier is in golden handcuffs intricately crafted by foreign carrier interests. But handcuffs nonetheless. The foreign progenitors of this structure stand to profit not only from their investment in Virgin America, but also the revenues that they have impermissibly caused to be directed to their commonly controlled foreign air carriers and marketing entities. This is precisely what the prohibition on foreign control of U.S. air carriers was designed to prevent, and why the application of Virgin America Inc. must be denied.

Counsel: Susan Jollie, 703-354-8450, sjollie@verizon.net

April 20, 2007

Answer of Virgin America to the Contingent Motion of AFA for Leave to File an Unauthorized Document and Answer

As AFA candidly noted in its "Contingent Motion," AFA "has not been an active participant in this proceeding," throughout the more than fifteen months it has been ongoing. In terms of proffering "good cause" for its belated filing, AFA' s only excuse is that it "heretofore relied on other parties with complementary interests," and "had reason to believe that timely objections reflecting AFA's concerns were going to be filed by another party." Yet, "hoping" for surrogates to make your case does not constitute "good cause" for ignoring the very clear provisions of a Departmental procedural order.

Counsel: Virgin America and Pillsbury Winthrop, Kenneth Quinn, 202-663-8000

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OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

April 23, 2007

Answer of Association of Flight Attendants-CWA - Corrected | Word

Please accept a Corrected Version of the Answer of the Association of Flight Attendants-CWA, which was filed on April 19, 2007.

I am new to the DOT filing procedures, and thought that the Answer and an accompanying Contingent Motion had to be filed in Adobe Portable Document Format. A copy of the Answer in Microsoft Word format was transmitted to AFA-CWA by outside counsel at 4:34 p.m. on Thursday, April 19, 2007.  In the process of converting the document, some formatting and typographical errors were introduced. This is the document that was submitted on April 19, 2007. The attached Corrected Version corrects typographical errors, word omissions, and other minor changes that do not affect the substance of the pleading that was filed on April 19, 2007.

It took some time to convert from the Word format to PDF, so that although the Motion and Answer were ready to electronically file into DOT Docket 23307 before 5 P.M. in Word format, the conversion delayed the filing until about 5:30 P.M. Counsel for AFA-CWA has made inquiries and, based on discussions with DOT personnel, she has advised that the Contingent Motion to File an Unauthorized Document requesting leave to file on April 19, 2007 would be interpreted to include a filing after 5:00 P.M. that was received by the Department on April 19, 2007.

Counsel: AFA-CWA, Christopher Witkowski, 202-434-0593, cwitkows@cwa-union.org

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April 30, 2007

Motion of Air Gumbo

Motion to File

Air Gumbo, Inc. supports the Department of Transportation granting the applicant, Virgin America, Inc., tentative order to show cause. However Air Gumbo Inc. believes that the Department must stand firm in its determination that Mr. Fred Reid has to go. Mr. Reid, a seasoned airline executive, knew or should have known of the U.S. citizenship requirement to operate a domestic airline. Air Gumbo Inc. believes that the Department had properly found that the relationship between Mr. Reid and Sir Richard Branson was sufficient to deem Mr. Reid a non-U.S. citizen. To allow Virgin America to retain Mr. Reid would clearly contradict the citizenship requirement.

Virgin America claiming that its strategic survival depends on Mr. Reid serving as CEO, or in any other employment capacity, implies that that fiduciary relationship between Mr. Reid and Sir Branson will always be vital. Furthermore, Virgin America undertook that inherently risky conduct when it filed its application with the Department as a non-U.S. citizen, so for them to cry now makes one wonder if Virgin America really wants to enter and compete in the U.S. market, or whether they are simply attempting to manipulate the Department.

If Virgin America wants to keep Mr. Reid, then the starting-up airline would need to change its name, as the organization said it would willingly consider doing in order to be allowed to enter the U.S. market.

Counsel: Air Gumbo, Ralston Champagnie, 337-781-0034. ralston@airgumbo.com

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Order 2007-5-11
OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

Issued and Served May 18, 2007

Final Order - Bookmarked

Based on the record of this case, we here confirm and make final our tentative findings in Order 2007-3-16. Specifically, we find that Virgin America will be a U.S. citizen and will be fit, willing, and able to engage in interstate schedulcd passenger air transportation, following implementation of conditions.

Virgin America has asked the Department to either remove in its entirety or amend our proposed condition regarding Mr. Reid’s employment with the company. Air Gumbo supports our tcntative finding that Virgin America rnust terminatc Mr. Reid’s employment. We agree that such a condition is necessary to ensure that U.S. citizens will control Virgin America. We find that Virgin America’s replacement of Mr Reid as CEO and board member with a U.S. citizen who has no prior affiliation with the Virgin Group would, with the other VAM changes and implementation of our proposed conditions, remedy our concerns over the indcpendcnce of the applicant’s management from the Virgin Group. We recognize and are mindful, however, that the replacement of a company’s CEO is difficult. For this reason, we have decided to condition certification of Virgin America on Mr. Reid’s replacement as CEO no later than six months after the issuance of a Final Order. Moreover, if the company wishes to retain him as a consultant to facilitate further an orderly transition, we would permit Mr. Reid to remain as a consultant for up to three months following his replacement as CEO, Mr. Reid’s total transitional pcriod will thus remain no more than nine months, as originally proposed in our Order to Show Cause.

Because no new arguments have been presented to convince us that our tentative findings in Order 2007-3-16 should not be made final, we find that Virgin America will meet our citizenship requirements.

By: Andrew Steinberg

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OST-2007-28673 - Waiver of the Provisions of 14 CFR 201.5

July 3, 2007

Application for a Waiver

Virgin America is fully prepared to implement its ticketing and sales efforts now and commence operations before the summer travel season ends. As a new entrant in this competitive market, it is critical that Virgin America be given a full opportunity to compete in the marketplace as soon as possible. As demonstrated by the extraordinary lengths to which Virgin America has gone in the past two and a half years to obtain its certificate.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

Served July 5, 2007

Notice Establishing Answer Period to Application for a Waiver

On July 5, 2007, Virgin America, a non-operating certificated air carrier, filed an application requesting the Department to provide it relief from the provisions of section 201.5 of our rules to the extent necessary to allow it to accept payment and issue tickets for its prospective air carrier operations. Virgin America requested that we act on its application by July 10 without waiting for answers, or in the alternative, set an answer period of 3 days. Based on our review of the applicant's request, we have decided to give interested parties until July 10 to file answers to Virgin America's waiver application.

By: Todd Harmon

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OST-1996-1960 - Family Assistance Plans

July 6, 2007

Family Assistance Plan

By: Virgin America, Gary Hall

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OST-2007-28673 - Waiver of the Provisions of 14 CFR 201.5

July 11, 2007

Email Message - DOT Oral Approval of Waiver of 14 CFR 201.5

We have this morning established that Virgin America's request is unopposed.

Based on the information provided to the Department by the company, the Department orally approves (effective July 11, 2007) Virgin America's request for a waiver from 201.5 of our rules to the extent necessary to permit the company to accept customer payments and to issue tickets for air transportation from prospective passengers prior to receiving effective authority from the Department.

Written confirmation to follow.

By: Air Carrier Fitness, Bill Bertram, 202-366-1062

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Order 2007-7-13
OST-1995-923
OST-2007-28594 - Amended Foreign Air Carrier Permit and Exemption - US-EU Open-Skies

Issued and Served July 13, 2007

Order Granting Exemption and to Show Cause

We grant the request of Virgin Atlantic Airways Ltd. for an exemption under 49 U.S.C. 40109 to permit it (1) effective on the issue date of this order, to accept payment and issue tickets, and (2) effective March 30, 2008, to commence flight operations, for the services set forth below:

1. foreign scheduled and charter air transportation of persons, property and mail from any point or points behind any Member State of the European Union, via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond;
2. foreign scheduled and charter air transportation of persons, property and mail between any point or points in the United States and any point or points in any member of the European Common Aviation Area;
3. foreign scheduled and charter cargo air transportation between any point or points in the United States and any point or points;
4. other charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s regulations; and
5. transportation authorized by any additional route rights made available to European Community carriers in the future.

We find that grant of the requested exemption authority, as conditioned, for a two-year term, or until the requested permit authority becomes effective, whichever occurs earlier, is warranted.

With respect to the applicant’s request for an amended foreign air carrier permit in this proceeding, we direct all interested persons to show cause why our tentative decision on that application, set forth above, should not be made final.

By: Paul Gretch

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July 17, 2007

Association of Flight Attendants-CWA Petition for Court Review of Order 2007-5-11 - Ninth Circuit Court of Appeals

Counsel: Susan Jollie, 703-354-8460, sjollie@verizon.net

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Order 2007-8-17
OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger
OST-2007-28673 - Waiver of the Provisions of 14 CFR 201.5

Issued and Served August 17, 2007

Order Confirming Oral Actions and Issuing Effective Certificate

We confirm our oral action of July 11, 2007, granting Virgin America Inc., a waiver of the pre-operational ticket sales prohibitions of 14 CFR 201.5 to allow it to issue tickets and accept payments from prospective passengers prior to receiving effective Department authority.

We confirm our oral action of August 7, 2007, making the section 41102 interstate scheduled certificate authority issued to Virgin America Inc., effective on that date.

We reissue to Virgin America Inc., the interstate scheduled section 41102 certificate issued to it by Order 2007-5-11 in the attached form to reflect its effective date.

By: Andrew Steinberg

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OST-2007-29229 - Exemption or Modification of Order 2007-5-11

September 11, 2007

Petition for an Exemption or Modification

Motion for Confidential Treatment

Virgin America, Inc. respectfully petitions the Department for an exemption from or modification to the requirements of Order 2007-5-11 on the final term for its current Chief Executive Officer. Specifically, Virgin America requests that it be able to convert the three month DOT-permitted consultancy period of Mr. Fred Reid, its CEO, into three months fall time tenure as CEO. This conversion would allow Mr. Reid to remain in his current position as CEO until February 18, 2008, a period of nine months instead of the currently permitted six month period that was to be followed by three months as a consultant.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

Served September 12, 2007

Notice Establishing Answer Period to Petition for an Exemption or Modification

On September 11, 2007, Virgin America Inc., a U.S. certificated air carrier, filed a petition requesting the Department to provide it relief from the condition related to the employment period set forth for Mr. Frederick W. Reid, its Chief Executive Officer. Specifically, Virgin America requested that it be able to convert the three-month consultancy period of Mr. Reid into three full months as CEO of the company. The company requested that we act on its petition by September 17. Based on our review of the applicant’s request, we have decided to give interested parties until noon on September 14 to file answers to Virgin America’s petition, with replies due no later than noon on September 17.

The Department conditioned the effectiveness of Virgin America’s authority to, among other things, it amending its employment contract with Mr. Reid to provide for the termination of his employment with Virgin America as CEO within 180 days of the issuance of the Final Order in this case (i.e., May 18, 2007), and any follow-on consultancy within 90 days following his termination of employment.

By: Todd Homan

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OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

September 12, 2007

Confidentiality Affidavit for Association of Flight Attendants-CWA - Alan Schneider

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OST-2007-29229 - Exemption or Modification of Order 2007-5-11
OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

September 14, 2007

Answer of Association of Flight Attendants-CWA | Word

The Association of Flight Attendants-CWA opposes the request for exemption or alternative form of regulatory relief to permit Frederick Reid to continue serving as President of Virgin America.  AFA believes that the Department erroneously concluded that conditions that were placed on the corporate governance of VAI were sufficient to enable Virgin America to qualify for a U.S. air carrier certificate notwithstanding the earlier conclusion that VAI was impermissibly controlled by foreign citizens. An element of that initial adverse determination was that Frederick Reid was tainted by his recruitment and involvement with the Virgin Group. From this request and other recent events, it is evident that Sir Richard Branson and VAI intend to stretch the boundaries beyond what VAI represented to the Department to secure its certificate.

AFA also objects to VAI’s Motion for Confidential Treatment. In this and other pleadings in these proceedings, VAI has asserted confidentiality for statements or documents that contain no trade secrets or only marginally sensitive commercial information. Because VAI has repeatedly abused the procedural rules for confidential treatment, even vague descriptions of the contents of these documents in pleadings and DOT Orders have been veiled in confidentiality that is not merited.

Counsel: Susan Jollie, 703-354-8450, SJollie@verizon.net

OST-2007-29229 - Exemption or Modification of Order 2007-5-11

Served September 14, 2007

Notice Granting Access to Confidential Material | Word

On September 11, 2007, Virgin America Inc., a U.S. certificated air carrier, filed a petition requesting the Department grant it an exemption to, or a modification from, the condition related to the employment period set forth for Mr. Frederick W. Reid, its Chief Executive Officer, together with a Motion under 14 CFR § 302.12 of our regulations seeking confidential treatment for certain information.  The company also requested that we act on its petition by September 17.

On September 14, the Association of Flight Attendants-CWA filed an answer to Virgin America’s petition, objecting to, among other things, Virgin America’s Rule 12 filing.  No other answers were filed by interested parties.

In order to afford AFA-CWA and any other parties to Docket OST-2007-29229 prompt access to the documents, we will grant immediate interim access to all documents covered by the Rule 12 Motion to counsel and outside experts for such parties who file appropriate affidavits with the Department in advance.  Moreover, Parties will be permitted to make copies of the exhibits, at the Dockets facility, for use by persons who have filed confidentiality affidavits.  We also find it appropriate to grant interim access to any subsequent materials that may be filed in this docket under a Rule 12 Motion to counsel and outside experts for parties who file appropriate affidavits with the Department in advance, unless the party filing the Motion objects.

Further, any supplemental comments on the petition in this docket based on the confidential material will be due no later than noon on September 17.

By: Todd Homan

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OST-2007-29229 - Exemption or Modification of Order 2007-5-11

September 17, 2007

Reply of Virgin America to Answer of Association of Flight Attendants-CWA

AFA-CWA’s Answer reaches beyond the scope of Virgin America’s Petition by asking the Department to re-visit the merits of its Final Order. Suggestions that the Department “erroneously concluded that conditions that were placed on the corporate governance of VAI were sufficient to enable Virgin America to qualify for a U.S. air carrier certificate,” are not at issue in this Docket. To the extent permitted, any substantive review of the Department's Order will take place in the Court of Appeals on AFA-CWA’s petition for review based on the considerable record upon which the agency based its decision, which included over 15,000 docket submissions.

In an attempt to support its review on the merits of the Department's Final Order, AFA-CWA cites to a Comedy Central interview of Richard Branson. For purposes of the instant Petition to simply convert the three month consultancy to a completed CEO term, the Department should ignore non-evidentiary, after-the-fact loose characterizations made on cable comedy shows that end in water fights.

AFA-CWA’s argument that the conversion of Mr. Reid’s three month consultancy into a continuation of his term as CEO would “allow impermissible foreign air carrier influence to drag on” is unfounded. The conditions placed upon Virgin America’s certificate, which include extensive limitation on minority investor rights, ensure that the carrier will remain firmly under the control of U.S. citizen investors. Virgin America seeks a reasonable and modest three-month extension to allow retention of the best qualified successor CEO possible. This need was further substantiated in the Affidavit of Donald Carty, the Chairman of the Board of Directors, filed with Virgin America’s petition. As AFA-CWA is well aware, Virgin America’s request is not without precedent, as the Department has modified or lifted conditions on several other certificated carriers while ensuring continuing compliance with citizenship or ongoing fitness requirements.

Virgin America respectfully requests that the Department: (1) grant it the requested relief from the condition related to the employment period permitted for its CEO Fred Reid; and (2) afford it confidential treatment for designated portions of its petition as requested in its previous motion.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

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Order 2007-9-18
OST-2007-29229 - Exemption or Modification of Order 2007-5-11

Issued and Served September 18, 2007

Order Granting Exemption

By this order, we exempt Virgin America Inc. from the condition in Order 2007-5-11, issued May 18, 2007, limiting the employment of Mr. Frederick W. Reid as the company’s Chief Executive Officer to no more than 180 days from the issuance of that order, to the extent necessary to permit Mr. Reid to remain as CEO for an additional 90 days, that is, until February 18, 2008. The grant of this exemption, however, does not extend the overall period in which Mr. Reid may remain employed by and/or involved in Virgin America. Our decision simply permits Mr. Reid to serve as the company’s CEO for 9 full months in lieu of 6 months of him serving as CEO and 3 months as a consultant as set forth Order 2007-5-11. After such time, Mr. Reid may no longer be employed by Virgin America in any capacity.

By: Andrew Steinberg