U.S. certifies Virgin America Airlines for service
WASHINGTON (Reuters) - Virgin America Airlines, the low-cost carrier with ties to British entrepreneur Richard Branson, received its operating license on Wednesday from U.S. aviation authorities and announced plans to sell tickets.
The carrier plans to start flying in August from its San Francisco base. Virgin America will fly new Airbus A319s and A320s and plans to serve up to 10 cities within a year of its launch. Routes will be announced in the coming weeks.
Virgin America won regulatory approval of its business plan in May after agreeing to restructure its investor financing -- including millions from Branson's interests -- and promising to replace its chief executive, Fred Reid, to satisfy a U.S. law that limits overseas influence in domestic airlines.
Virgin America will still have a branding and marketing relationship with Branson's Virgin Group, which operates British-based Virgin Atlantic Airways. Some U.S. airlines had opposed Virgin America's entrance, saying Branson would be controlling the airline one way or another.
Virgin America has said it is an American carrier and operating decisions will be made by U.S. citizens, as the law requires.
The operating license granted by the Federal Aviation Administration demonstrates that Virgin America meets U.S. aviation safety standards. It was the final government hurdle needed to launch service.
Virgin America submitted its initial application for service in December 2005, which was denied. It amended its business proposal in January to address U.S. Transportation Department concerns with its ownership group.
Virgin America enters a crowded market in which major U.S. carriers are struggling to maintain the industry's modest recovery begun last year. Carriers have been buffeted by high fuel prices and softening demand.
The biggest airlines are cutting the number of seats available for sale domestically, and shifting their emphasis to lucrative international routes.
Virgin America's most direct rival is JetBlue Airways, based in New York's John F. Kennedy International Airport. And Southwest Airlines is beginning San Francisco service this fall.
