Virgin America

[concorde001]

As expected, the US Department of Transport has denied Virgin America's application to begin flights on the grounds that it fails to meet laws regarding foreign ownerhsip (current limit is 25%).

Bloomberg Article

US DoT Order

[Queenslander]

This could get very interesting, with the Americans saying no to virgin, what is the probability that the Europeans will say no to the additional American airlines accessing Heathrow?

[flyboyike]

Originally Posted by Queenslander

This could get very interesting, with the Americans saying no to virgin, what is the probability that the Europeans will say no to the additional American airlines accessing Heathrow?

What's at issue here is not whether Virgin group can fly to the US (Virgin Atlantic operates numerous dailies here), but whether they are to be permitted to establish a domestic operation flying domestic flights in the US. How many American carriers operate domestic flights in the UK?

[scruggs]

What will happen to the airbus frames already delivered? Oh - and the hired staff?

[matt_hooks]

Originally Posted by flyboyike

What's at issue here is not whether Virgin group can fly to the US (Virgin Atlantic operates numerous dailies here), but whether they are to be permitted to establish a domestic operation flying domestic flights in the US. How many American carriers operate domestic flights in the UK?

Sounds like they are looking for cabotage rights. They are very unlikely to get them. I'm not aware of any countries that will allow a foreign carrier to run domestic flights. OK it could be said that's exactly what Ryanair do in the UK but it's not quite the same.

The denial is perfectly legal. There is no compulsion for a country to allow anyone these rights.

[jimworcs]

How is Ryanair operating flights in the UK different from UK based airlines operating in the US? Both are sovereign states. Any European airline can operate any route within Europe regardless of where the airline is registered.

Second, Virgin structured the deal in such a way that US interests owned over 75% of the company and so felt that their submission was within the law. However, Congress are highly touchy and protectionist, as evidenced by their ridiculous reaction to the P&O Ports takeover by Dubai. What is so special about airlines that they need such protection? The vast majority of world wide conglomerates are US based and it is hypocritical of them to refuse to allow Virgin to start services. It is not ownership that this has been denied on, but a more subjective test of "influence".

It is time to challenge this protectionist crap.

[Imhotep]

Originally Posted by flyboyike

] How many American carriers operate domestic flights in the UK?

Within Europe, UPS operate flights with N reg aircraft and US crews

[Flame]

Originally Posted by flyboyike

How many American carriers operate domestic flights in the UK?

Showing my age here....I remember Pan Am and TWA operating within Europe some years back..but cannot remember why they stopped, perhaps because they went out of business..??

[Al Fakhem]

Originally Posted by Flame

Showing my age here....I remember Pan Am and TWA operating within Europe some years back..but cannot remember why they stopped, perhaps because they went out of business..??

Those were flights to and from Berlin, where Lufthansa were not permitted to fly to in those days.

[Wino]

Jimworcs

Virgin did NOT structure the deal properly within US law. They just said they did.

Look here
http://www.planebuzz.com/
and more interestingly here for the actual dot filing
http://dmses.dot.gov/docimages/pdf99/434510_web.pdf

and you will see that they are not even close to being in compliance, no matter what their press agent might say.

Cheers
Wino

[Ignition Override]

So much has already been lampooned, satirized and ridiculed about the US airline industry's inability/discipline to regulate the over-bloated, chronic seat-capacity and pricing problems.

Other than the ownership factor, another airline will never help the situation.
Ryanair has operated non-stop from US major airports to Mexico-3rd or 4th freedom cabotage?
T
he Lead Purser on one Ryanair flight attendant crew, with whom I chatted in Milwaukee (MKE), lived in Dusseldorf (DUS), or so she told me.
They all wore the nice, Lufthansa-style yellow scarves . Attraktiv, nicht?

[ETOPS]

Ignition Override

A bit of post holiday confusion?

It's Ryan Airlines your Purser friend works for not Ryanair..........

[touch&go]

matt_hooks

you'll find AirBerlin operate within the uk, STN to Man and STN to GLA are two I have flown on and the safety demo was in German.

[zed3]

United used to fly Brussels LHR with a B727 as a feeder for the trans atlantics and I think from other European points , around 12 years ago . Delta also did the same I seem to remember .

[waterpau]

you'll find AirBerlin operate within the uk, STN to Man and STN to GLA are two I have flown on and the safety demo was in German.

I thought the open skies in Europe allowed this. On the other side of the coin, Easyjet have permanent bases in Paris and Madrid flying within Europe on British registered aircraft.

There are two sides to the argument; while it's hypocritical of America to apply foreign ownership restrictions to operations within the US, it is intended to protect the value of the market and ensure US citizens get a look in. Protectionist, yes, but it's demonstrative of a wider problem. You only have to look at the number of UK PLCs being bought by foreign private equity in the UK and then being delisted from the markets. The companies are 'streamlined', and potentially stripped of assets, before being sold on at a large profit. That profit then goes in the pocket of already rich private investors rather than into, say, UK pension funds for your average UK Joe.
You can't blame the US for looking after its interests of its citizens.

If there is indeed any money to be made from the US domestic lo-co market, surely it doesn't belong in Sir Richard's pocket.

waterpau, rummaging for a red flag...

[little bird]

Is it any more or less appropiate than R Branson making money off the Australian lo-co market.
While the established airlines will undoubtably be pleased by this decision, is it really good news for the average american. All those potential jobs that now won't happen, and the extra competition, which is usually good for the consumer.

[ExSimGuy]

Pan-Am, FRA ?

Prior to Gulf-One and the subsequent demise of the airline, Pan-Am had a base/hub in Frankfurt, from where they operated to (at least) LON, RUH, ATH.

[matkat]

Originally Posted by zed3

United used to fly Brussels LHR with a B727 as a feeder for the trans atlantics and I think from other European points , around 12 years ago . Delta also did the same I seem to remember .

Yes that is right they (Delta) operated at least one feeder flight I know about which was Prague to Frankfurt?Amsterdam circa 1995.

[flyboyike]

Originally Posted by waterpau

If there is indeed any money to be made from the US domestic lo-co market, surely it doesn't belong in Sir Richard's pocket.

Nor is it likely to fit therein, can't be much room left in them pockets.

[Lucifer]

Originally Posted by matt_hooks

Sounds like they are looking for cabotage rights. They are very unlikely to get them. I'm not aware of any countries that will allow a foreign carrier to run domestic flights. OK it could be said that's exactly what Ryanair do in the UK but it's not quite the same.
The denial is perfectly legal. There is no compulsion for a country to allow anyone these rights.

Sorry, but there are a few over-simplifications, such as the above.

Virgin America is designed as a 25% ownership by Branson's Virgin group - exactly the same as Virgin Blue in Australia is limited to minority foreign stakes only. What is at question in the application is whether he is in fact excercising control (i.e. effectively >50% ownership) through the financial structure - cabotage is irrelevant.

Take care to compare to Europe, as each EU state is currently classed as a separate country, and additionally, during the Cold War, intra-German and Europe flight by US airlines were part of a completely different network, which was designed for political reasons (military support and non-commercial connections).

Furthermore, intra-EU being free is NOT the same as US airlines operating within the EU from one country to another, as these are separate states from the perspective on the US airline, for which cabotage is currently irrelevant, based upon the treaty structure in place at the current time.