Virgin America on Thin IceFebruary 26, 2009
Despite being popular, hip, and backed by billionaire Sir Richard Branson, Virgin America suddenly finds itself with an uncertain future. Following a $227 million loss during its first 12 months, Virgin's hedge fund investors, which own approximately 75% of the airline, are considering a retreat. And believe it or not, that's worse than it sounds. With 28 jets that's a loss of $10M per aircraft..
Not only would Virgin have to pay back the investors' money plus 8 percent interest, but according to Dan Reed at USA Today, "Virgin America's rivals claim that [Virgin America] would violate U.S. law that says airlines operating domestic routes in the USA must be 51% owned by Americans who have 76% voting control." Essentially, if Virgin loses too many of its American investors, the airline is no longer American enough to operate here.
mummy won't be pleased..