Alaska Pushes on Virgin America's Ownership Question

Last Updated Sep 2, 2009 10:33 AM EDT

A couple weeks ago, Alaska Airlines decided to continue its full court press to have Virgin America declared foreign-owned. As we know, if that happens, Virgin America won't be allowed to fly and that's precisely what Alaska is hoping. Their latest attack, however, caught me by surprise, primarily because they've cited me in their filing.

I have to assume that the bottom line here is that Alaska wants Virgin America off its turf. So they're really pushing on this ownership issue. They're calling this most recent filing a renewal of their request to investigate Virgin America's ownership structure.

Alaska says that Virgin America hasn't disputed the sale of shares by its original investors, but that is probably still up for debate. In a recent interview with Dan Webb for his blog Things in the Sky, Virgin America chief David Cush said,

We still have the current investors that we've always had. The investors that we had at launch are still the current investors.
That can be taken several ways. It could mean that they still are invested in the airline with cash, or it could mean that they still hold voting rights but they got their cash back. That's hard to say, but it does cast doubt on the previous report that new investors had been found.

It was that report that I cited in a July 10 post here on BNET regarding Virgin America's ownership. But there I was on page 6 of the filing (pdf), being cited as one source suggesting that "it is reasonable to assume that Virgin Group will offer a 'put-centric, risk-free' plus plus structure, thus further straining the statute's US citizen ownership requiements."

I still think that's right, but that is, of course, assuming that they have new investors. This is something that David Cush is denying. My head hurts.

This whole thing is just silly. I know it's the law, and I certainly believe in following the rules out there, but there hardly seems to be concrete proof of foreign ownership. Virgin America's recent results were relatively decent, so that will only stoke the fire more. I suppose it makes sense for Alaska to try any (legal and ethical) avenue possible to improve its bottom line, but the DOT needs to stop dragging its feet and just make a ruling here so we can all move on.