The US Transportation Department stated on Friday that Virgin American Airlines can begin service once it has cleared certain safety requirements.
Virgin America hopes to compete with domestic carries like JetBlue in terms of quality of customer service. To win regulatory approval the group had to cut certain ties to Branson's Virgin Group. U.S. law restricts foreign ownership in airlines to 25 percent of voting stock.
The Transportation Department also cited the pervasive involvement of Virgin Group and its executives in creating Virgin America, and found that the new carrier would probably be controlled by Branson and his interests.
In response, Virgin America promised that before it began flying it would change loan agreements and remove certain powers of Virgin Group; revise its trademark to ensure independence from Virgin Atlantic and establish a voting trust to administer Virgin Group's equity interest in the airline.
Virgin Group committed $88.4 million in debt and equity financing -- slightly less than one-half of the company's start-up financing of $177.3 million.
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The US Transportation Department stated on Friday that Virgin American Airlines can begin service once it has cleared certain safety requirements.
Virgin America hopes to compete with domestic carries like JetBlue in terms of quality of customer service. To win regulatory approval the group had to cut certain ties to Branson's Virgin Group. U.S. law restricts foreign ownership in airlines to 25 percent of voting stock.