Virgin America, Inc.

Order 2006-12-23
OST-2005-23307 - Certificate of Public Convenience and Necessity - Interstate Scheduled Passenger

Issued and Served December 27, 2006

Order to Show Cause - Bookmarked

After a careful review of the record now before us, we tentatively find that: (1) less than 75 percent of the total equity of the applicant, Virgin America, is held by U.S. citizens, and (2) Virgin America is under the actual control of Carola Holdings Limited, Virgin Management Limited, Virgin Group Investments Limited, and Virgin USA, inc., collectively referred to herein as the "Virgin Group" or the "Virgin group of companies," and Sir Richard Branson, all of whom are U.K. citizens) We emphasize that U.S. aviation law does not prohibit U.S. citizens from entering into arms-length franchise arrangements with foreign airlines; but the totality of circumstances presented in this matter persuades us that, at this stage, the applicant has not shown that it is or will remain sufficiently independent of foreign control to satisfy our citizenship requirement. Therefore, by this order, we propose to conclude that Virgin America is not a U.S. citizen as defined in 49 U.S.C. § 40102(a)(15) and hence to deny its application for interstate scheduled air transportation of persons, property, and mail under 49 U.S.C. § 41102, As is our practice, we provide a period of 14 days to the applicant and other interested persons to comment on this proposed decision.

By: Andrew Steinberg