As seen at the Wall Street Journal (subscriber link):
The government Wednesday tossed a roadblock in the path of startup airline Virgin America Inc., ruling the company must change its ownership and corporate structure before it can receive an operating certificate.
Under the law, a U.S. airline must be 75% owned and controlled by Americans; the Department of Transportation said Virgin America doesn’t currently meet that requirement. Virgin America is based in Burlingame, Calif., and had planned to begin flights in 2007.
The folks over at Continental must be tickled pink over this ruling. They’ve been extremely vocal in their efforts to block Virgin America from getting its operating certificate.
I can understand the DOT’s calling into question Virgin America’s independence from Sir Richard Branson’s empire. However, in this day and age the 75% citizenship requirement seems a little anachronistic, especially given how poorly legacy carriers seem to be doing.
True, national security concerns are more than a strawman argument here, but you’d think that granting the DOT authority to waive the 75% rule on a case-by-case basis would be tolerable. While I can understand why the national security hawks might be uncomfortable if Taliban Air sought authority run an airline flying 757’s and 767’s between cities on the Northeast Corridor, you’d think that having British involvement (with Virgin America) or Dutch/French involvement (c.f. old speculation about a KLM/Northwest merger) would be perfectly palatable.