In a setback to rival domestic low-cost airlines, the U.S. Department of Transportation ruled last week that British migrant Virgin America Inc. will be able to keep its U.S. citizenship.
In a letter dated Friday, the DOT said Virgin has at least 75% of its interest controlled by U.S. citizens, and therefore meets agency requirements to be a U.S. certified carrier. Virgin is 75% owned by VAI Partners LLC, a Delaware limited liability company, and 25% owned by Virgin Group, founded by British businessman Richard Branson.
Further, Virgin will expand its board to nine from eight to include Chief Executive David Cush, a U.S. citizen, the letter said.
Alaska Airlines, had objected to Virgin’s U.S. citizen status. The upstart represents a significant threat to budget carriers as it expands deeper into the American market and cuts average ticket prices to win customers.
Virgin is a small airline with 100 daily flights and over 1,500 employees. It is based out of Burlingame, Calif., with its hub in San Francisco, and flies to New York, Boston, Seattle, Ft. Lauderdale, Fla., and several other destinations within the U.S.
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