An overview of Virgin America

A number of carriers, led by Continental Airlines Inc., challenge whether Virgin America is controlled by U.S. citizens, as required by law, or by Richard Branson. Branson who provided some financial backing for Virgin America and who originally conceived of the business.
Branson’s Virgin Group Ltd. of London controls 25 percent of the airline’s voting stock. The United States limits foreign ownership of U.S. airlines to 25 percent.
The Department of Transportation recently asked Virgin America for additional information about Branson’s role in forming the airline.
Virgin America executives said the airline complies with U.S. law because it is controlled by U.S. citizens.

legal?

Many countries have protectionism of their airlines. In this example, it is the US saying that foreigners can’t have a US airline. The Aussies have a similar law about Qantas.

Question:

Is this illegal under WTO rules?

If so, do you see any legal challenges being mounted?

By law, a U.S. airline must be owned by a majority (75% of equity) of U.S. citizens and must be under the “actual control” of U.S. citizens. The DOT ruled in late December 2006 that Virgin America “tentatively” did not meet these requirements. Virgin America still hopes the Department of Transportation will find that it meets these requirements. VAI Partners LLC will own 75% of the capital stock and will appoint two-thirds of the voting members of the board of directors. Virgin America is separate from Virgin Atlantic and as such is under no obligation to work with Virgin Atlantic, Virgin Blue, Virgin Express, Virgin Nigeria or other companies that share the Virgin brand name.

Interesting IFE options there, I take it they’ve been grounded because they aren’t fully US owned or some such reason ?