Alaska Airlines Petitions U.S. Department of Transportation to Investigate Virgin America’s Citizenship Status

Alaska Airlines today petitioned the U.S. Department of Transportation (DOT) to conduct a public inquiry into the citizenship status of Virgin America.

Citing recent media reports that call into question Virgin’s compliance with U.S. foreign ownership and control restrictions on domestic carriers, Alaska Airlines asked DOT to investigate Virgin’s current as well as prospective capital and governance structures and their effect on Virgin’s U.S. citizenship status.

U.S. law requires air carriers to be U.S. "citizens." To qualify, the outstanding voting interests of the air carrier must be at least 75-percent owned by U.S. citizens and the carrier must also be effectively controlled by U.S. citizens.

Alaska’s petition cites news reports suggesting that Virgin America, founded by the British Virgin Group, may no longer be a U.S. citizen or is in clear danger of losing its citizenship. These include reports of investors owning 75 percent of Virgin America’s voting stock with imminent rights to sell their shares back to the foreign-owned Virgin Group and of new funding from investors, apparently including Virgin Group, under terms and conditions not revealed to the public.

"Only through a careful and ongoing review of Virgin America’s recent actions conducted on the public record can the DOT and public be assured that Virgin will remain a U.S. citizen," said Keith Loveless, general counsel for Alaska Airlines.

Virgin America’s compliance with U.S. citizenship requirements was a point of controversy and debate during its certification proceeding. DOT initially determined that Virgin America did not comply and required the company to restructure before granting initial certification. "Since the issuance of their certificate, Virgin America’s structure and operations have clearly changed; however, there is a lack of public information about those changes or how they may impact its citizenship status," Loveless said. "Alaska makes this request to ensure all U.S. carriers are held to the same standard of compliance with U.S. citizenship laws. Recent questions about Virgin’s ownership status establish a compelling need for a transparent review of its continuing compliance with these laws."

Alaska Airlines and Horizon Air, subsidiaries of Alaska Air Group , together serve more than 90 cities through an expansive network in Alaska, the Lower 48, Hawaii, Canada and Mexico. Alaska Airlines ranked "Highest in Customer Satisfaction among Traditional Network Carriers (tie)" in the J.D. Power and Associates 2008 North America Airline Satisfaction Study(SM). For reservations, visit alaskaair.com. For more news and information, visit the Alaska Airlines/Horizon Air Newsroom at alaskaair.com/newsroom.

First Call Analyst:
FCMN Contact: maria.koenig@alaskaair.com

SOURCE: Alaska Airlines