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Virgin America wins final approval to enter US skies

Startup airline Virgin America won final approval on Friday to take to the skies in the US.

Federal regulators approved the company's revised plan to operate US-based commercial flights after the company made numerous concessions, including replacing its chief executive, to allay concerns about the foreign ownership stake of Richard Branson's London-based Virgin Group Ltd.

Service is expected to start this summer with flights from San Francisco International Airport to John F. Kennedy International Airport in New York.

In a statement, the US Transportation Department said Virgin's revised plan, filed in January by Burlingame, California-based Virgin America, is now in compliance with laws that limit foreign control of domestic air carriers.

That includes company ownership rules that cap foreign control of a US airline at 25 percent of voting shares. Virgin also agreed to replace CEO Fred Reid, the former Delta Air Lines Inc president hired by British billionaire Branson, founder of London-based Virgin Atlantic Airways.

The DOT said it concluded that replacing Reid with a CEO not affiliated with Branson's Virgin Group would alleviate worries about the airline's independence.

Other DOT conditions include requiring US directors on Virgin America's board to approve a trustee to represent Virgin Group's 25 percent stake and reporting to federal regulators any planned loans to the US carrier.
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