Airline pushes for approval 

Local startup airline Virgin America announced Wednesday that it secured $30 million in additional financial backing from U.S. investors in an attempt to ease fears over foreign ownership.

Cyrus Capital Partners and Black Canyon Capital are providing a combined $10 million in equity for the company. Cyrus Capital, following up on a previous announcement,said that it would also provide a $20 million loan to Virgin America once the airline is up and running.

Virgin America filed the new financing information Wednesday in response to the U.S. Department of Transportation’s tentative denial on Dec. 27 of the company’s application for a license to fly. Agency officials were concerned that British billionaire Richard Branson’s Virgin Group had significant control in the company, despite holding less than 25 percent of voting stocks as required by U.S. law.

The filing is the latest in a series of changes the company has made to its corporate structure to appease the DOT, including appointing former federal Secretary of Transportation Samuel Skinner as company vice-chairman and dropping one of the European-based Virgin Group’s three voting seats.

"We’re continuing to go above and beyond the DOT’s requests so we can get up and running," Virgin America spokesman Gareth Edmondson-Jones said.

CEO Fred Reid said Wednesday that he still takes issue with the concerns of foreign ownership, saying that there is foreign money in several U.S.-owned corporations.

Older air carriers including Continental Airlines have been among the most vocal critics of Virgin America. Continental Airlines spokesman David Messing declined to comment on the case on Wednesday, but has said in the past that Virgin America seemed to be trying to rush through the federal approval process.

Most of the company’s 175 employees, including Reid, took to the streets in downtown San Francisco on Wednesday to rally people behind their cause and hand out promotional items.

"They have every right to scrutinize us with a fine-toothed comb," Reid said. "We’ve jumped through hoops of fire for them so we can fly."

The airline already has solid support in San Francisco and on the Peninsula, where local officials are eager for the jobs and revenue the new airlinewould bring to San Mateo County and San Francisco International Airport.

"We still think it’s a definite asset for the county and the airport," San Mateo County Convention and Visitors Bureau CEO and President Anne LeClair said. "We’re pleased about anything that will make it more accessible and more affordable for travelers."

Tags: ,

About The Author

Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
Pin It

More by Staff Report

© 2018 The San Francisco Examiner

Website powered by Foundation