Virgin Air taxiing onto SFO runway 

Startup Virgin America airline hasn’t exactly been cleared for takeoff yet, but this week’s tentative approval from the federal Department of Transportation at least enabled the proposed low-fare carrier to rev up its engines and taxi onto the runway.

Because the new concessions demanded by the Transportation Department simply reflect compromise offers the airline already made in January, it seems an almost foregone conclusion that final approval will soon be won.

Conceivably Virgin America could take flight from San Francisco International Airport as early as this summer, starting with dailyservice to New York City’s John F. Kennedy International Airport. Whenever the carrier does actually get into the air, among the biggest winners will be San Francisco and San Mateo County.

Virgin America will be based at SFO and its headquarters offices are in Burlingame. The Bay Area and California aggressively wooed Virgin America with some $10 million in job-training funds, looking to gain the bulk of the 3,000 new jobs the airline promises to create.

Virgin America is still likely to generate a few more headlines before all obstacles are finally cleared from its flight path. Opponents have 21 days to file objections to the new ruling, and now the AFL-CIO unions joined competitor airlines Delta, Continental and American in a fight to keep Virgin America on the ground.

The AFL-CIO charged Wednesday that the Transportation Department approved Virgin’s application merely to "silence" flamboyant British billionaire Richard Branson’s criticism of the pending "Open Skies" trade pact, which would end many restrictions that have created a near monopoly on airline service between London and the United States.

Branson assembled the Virgin America deal and his investment group owns 25 percent of the fledgling airline, the legal maximum allowed for foreign ownership of a U.S. air carrier. American consortiums hold the remainder of the estimated $177 million startup.

The major question delaying government approval of Virgin America for nearly three years is how much control Branson and his British group truly has over the company. We may hope this issue will finally be resolved via compliance with the Transportation Department’s current demands.

Virgin America is to jettison its CEO, an American who was hired by Branson, and must replace a British-chosen member of the board of directors, which has already been done. It must also give advance notice of any new non-U.S. loans.

When Virgin America is ultimately allowed to transfer the successful high-spirited, low-fare format of Branson’s Virgin Atlantic throughout the U.S. market, benefits of increased competition will spread widely for air travelers, especially as the new airline fulfills its plan to roll out service to Los Angeles, Las Vegas, San Diego and Washington, D.C., during the first nine months of operation.

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Staff Report

Staff Report

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