U.S. Government Says No to Virgin America Startup

The U.S. government has ruled against Richard Branson’s startup airline Virgin America claiming the company must change its ownership and corporate structure before it can receive an operating certificate.

The U.S. Department of Transportation said Virgin America doesn't meet the requirement that the president and two-thirds of the board of directors are US citizens, and that at least 75 percent of the voting interest be owned or controlled by US citizens.

U.S. law requires a US airline must be 75 percent owned and controlled by Americans and the Department of Transportation said Virgin America does not currently meet that requirement.

The Transportation Department said Virgin America's close relationship with the British Virgin Group and the active involvement of executives in the UK firm in getting Virgin America started “indicates that the carrier is not under the actual control of U.S. citizens.”