Virgin America, Inc.

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