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Virgin America makes 'sweeping changes'

Jan. 19, 2007 at 10:12 AM   |   Comments

BURLINGAME, Calif., Jan. 19 (UPI) -- Virgin America Inc. has made changes to counter U.S. regulators' concerns about foreign control of the proposed low-cost airline.

To "remove any doubt" that its application complies with U.S. laws governing foreign ownership and control, Virgin America said Britain's Virgin Group would reduce its presence on the new carrier's eight-member board to two from three voting seats and relinquish veto or consent rights a minority investor normally has, Air Transport World reported Friday.

U.S. airlines must be controlled by U.S. citizens and foreign equity is restricted to 25 percent of voting stock.

The proposed Burlingame, Calif., airline also said it would put its voting shares into a trust approved by the U.S. transportation department, let the airline to fly without the Virgin name if necessary, remove Virgin Group head British entrepreneur Richard Branson from the Virgin America board and even fire Chief Executive Fred Reid, a former Delta Air Lines president Branson hired, if the U.S. Transportation Department requested.

Rival airlines have the opportunity to comment on Virgin America's latest application.

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