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AS Questions VX Citzenship Status  
User currently offlineHatbutton From United States of America, joined Mar 2005, 1500 posts, RR: 14
Posted (5 years 10 months 2 weeks 1 hour ago) and read 9548 times:

http://www.alaskasworld.com/newsroom...s/asstories/AS_20090210_071920.asp

"Citing recent media reports that call into question Virgin's compliance with U.S. foreign ownership and control restrictions on domestic carriers, Alaska Airlines asked DOT to investigate Virgin's current as well as prospective capital and governance structures and their effect on Virgin's U.S. citizenship status."

152 replies: All unread, showing first 25:
 
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3602 posts, RR: 10
Reply 1, posted (5 years 10 months 2 weeks ago) and read 9410 times:

Not surprising.

I think raising additional capital by VX will be both necessary and difficult given the econimic outlook and the newly released VX results. Being largely limited to USA sources for any additional capital infusion (possibly including debt as well) could create a significant impediment to the implementation of VX's business plan,.

We'll see.


User currently offlineBMI727 From United States of America, joined Feb 2009, 15831 posts, RR: 27
Reply 2, posted (5 years 10 months 2 weeks ago) and read 9395 times:

Old news. This whole thing has been going on since the idea of VX was announced. To quote an Airbus executive form the seventies: "I think that the big bad wolf is screaming because Little Red Riding Hood has bitten him in the ass."


Why do Aerospace Engineering students have to turn things in on time?
User currently offlineBigGSFO From United States of America, joined Jun 2005, 2951 posts, RR: 6
Reply 3, posted (5 years 10 months 1 week 6 days 23 hours ago) and read 9340 times:

Clearly VX's business was/is probably one of the most scrutinized of any others in recent times. Most certainly the concern of investors backing-out was questioned by the feds prior to green lighting them. AS doesn't like VX on their turf - and rightfully so - so they are attempting to leverage VX's recent financial news against them - again, rightfully so.

Never a dull moment in this industry. If it was, none of us would be here.


User currently offlineLightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
Reply 4, posted (5 years 10 months 1 week 6 days 23 hours ago) and read 9330 times:
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Quoting DLPMMM (Reply 1):
I think raising additional capital by VX will be both necessary and difficult given the econimic outlook and the newly released VX results. Being largely limited to USA sources for any additional capital infusion (possibly including debt as well) could create a significant impediment to the implementation of VX's business plan,.

I think this is a strategic move by AS to force VX to stick with domestic funding.

AS seems determined to get VX out of SEA...
http://www.airliners.net/aviation-fo...eneral_aviation/read.main/3818057/


How are Branson's other airlines doing profit wise? Now that VX has numbers out... they're not looking too good.

I do not think anything will come of this request until VX goes to the Capital markets for more funds... then VX will have to be sure to dot the "i's" and cross the "T's".

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineLAXintl From United States of America, joined May 2000, 26147 posts, RR: 50
Reply 5, posted (5 years 10 months 12 hours ago) and read 8785 times:

Response by VX, and a war of words with Alaska.

Also interesting revelation about the carriers ownership, and that the current US owners simply cannot sell out to anyone.

Quote:
Virgin America Calls Ownership A Private Issue With The DOT
Feb 24 , 2009

A four-word phrase could sum up Virgin America’s official response to the Alaska Airline’s request for a new U.S. Transportation Dept. public investigation into the ownership and control of the airline.

The phrase: Mind your own business.

In the Feb. 20 response filed with the DOT, Virgin America reiterated there is no threat that the airline will lose the U.S. ownership and control it is required to maintain under U.S. law, and that it has been privately keeping the DOT up-to-date on its financing. In part, that’s because the investors’ original deal with the airline essentially forbids them from cashing in their stakes until they find U.S.-based replacement investors.

“The department, not other airline competitors, is vested with the obligation to review citizenship, and it is the department, not other airline competitors, that needs notice of new funding or legitimate ownership issues,”
“Virgin America will also continue to comply with all department notification requirements and to ensure its compliance with all ownership and control requirements,” it added. “Thankfully for consumers, none of these notifications are required to be blessed by any of Virgin America’s competitors.”

It also accused Alaska of trying to get involved now — after having voiced no opposition prior — because of Virgin America’s competition to Alaska on the Seattle-Los Angeles and Seattle-San Francisco routes.

Full story (subscription required)
http://www.aviationweek.com/publicat...rship+A+Private+Issue+With+The+DOT

[Edited 2009-02-23 19:55:44]


From the desert to the sea, to all of Southern California
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13750 posts, RR: 61
Reply 6, posted (5 years 10 months 9 hours ago) and read 8601 times:
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Quoting LAXintl (Reply 5):
It also accused Alaska of trying to get involved now — after having voiced no opposition prior — because of Virgin America’s competition to Alaska on the Seattle-Los Angeles and Seattle-San Francisco routes.

"Competition." That's a funny word to use for VX, considering their numbers for those routes...  Wink

Besides, my understanding is that other carriers supported Alaska's petition to the DOT.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineMAN2SIN2BKK From Germany, joined Feb 2009, 247 posts, RR: 0
Reply 7, posted (5 years 10 months 4 hours ago) and read 8444 times:



Quoting BMI727 (Reply 2):
"I think that the big bad wolf is screaming because Little Red Riding Hood has bitten him in the ass."

 laughing 


User currently offlinePar13del From Bahamas, joined Dec 2005, 7649 posts, RR: 8
Reply 8, posted (5 years 10 months 4 hours ago) and read 8425 times:



Quoting BMI727 (Reply 2):
To quote an Airbus executive form the seventies: "I think that the big bad wolf is screaming because Little Red Riding Hood has bitten him in the ass

And were they right? The US has since lost how many a/c OEM, and Airbus became the largest producer of a/c, we have numerous threads debating how they did it, but just because someone complains does not mean they are blowing smoke.
VX has been mired in controversy from day one, why exactly is that, possibly because they are flirting with the fine line of the laws, rules and or regulations, that much I think is a given, so they should be prepared for folks to question whats going on, heck the DOT virtually had to force them to release required numbers, how much respect does that show for the country they are attempting to operate in? Note I said respect, since they have so far not done anything illegal which can be proved, but in some terms, they are a shady character.


User currently offlineBennett123 From United Kingdom, joined Aug 2004, 7809 posts, RR: 3
Reply 9, posted (5 years 10 months 3 hours ago) and read 8386 times:

How about AS beating VX by providing a better product for the consumer.

User currently offlineDLPMMM From United States of America, joined Apr 2005, 3602 posts, RR: 10
Reply 10, posted (5 years 10 months 3 hours ago) and read 8335 times:

My understandig is that the USA investors (Canyon and Blackrock I think it was) own 51% of the equity and 76% of the voting rights. The USA investmant groups put together pools of certified USA citizens to provide the necessary USA equity start-up capital for VX to comply with the USA regulations.

Part of the investment contract with investment groups contained a clause that lets them get out of the investment and receive back their entire initial investment amount after a given period of time. That milestone is apparently about to be reached, and the USA investors have declared their intent to VX that they will exercise their option to get out of the investment (not surprising given the current economic environment).

VX must now find new USA citizens as investors to take the place of the original USA investors. VX has hired a USA investment bank as an advisor to help it find the required new USA investors.

Apparently AS wanted to make sure that the DOT was aware of the situation, and that the DOT would not turn a blind eye if VX exceeded the foreign ownership restrictions.

edited to insert missing word "not".

[Edited 2009-02-24 06:09:51]

User currently offlineCharles79 From Puerto Rico, joined Mar 2007, 1331 posts, RR: 6
Reply 11, posted (5 years 10 months 2 hours ago) and read 8295 times:



Quoting Bennett123 (Reply 9):
How about AS beating VX by providing a better product for the consumer.

What a concept huh? Having flown both AS and VX I'd fly VX hands down anytime--MUCH better product and service! Besides, isn't this supposed to be a "free market" and the bedrock of "capitalism"? All they are doing is taking advantage of the loopholes that our own system has created it seems. Until a regulatory body formally presses charges against VX and they are found guilty all this complaining is nothing but fear of some good old fashioned competition.

Quoting DLPMMM (Reply 10):
VX must now find new USA citizens as investors to take the place of the original USA investors. VX has hired a USA investment bank as an advisor to help it find the required new USA investors.

Apparently AS wanted to make sure that the DOT was aware of the situation, and that the DOT would turn a blind eye if VX exceeded the foreign ownership restrictions.

AS and the other US based airlines have every right to complain but I'd rather see them compete with a better product and improved service rather than have to go crying "Mommy!" whenever a new competitor shows up.


User currently offlineBMI727 From United States of America, joined Feb 2009, 15831 posts, RR: 27
Reply 12, posted (5 years 10 months 1 hour ago) and read 8217 times:



Quoting Par13del (Reply 8):
they are flirting with the fine line of the laws, rules and or regulations,

Let's face it. Those are antiquated laws that are doing everything but helping American consumers. They are there and VX has to follow them, but protecting the "native" carriers doesn't help in the long run. These laws help enable the other carriers to get away with lower service levels. It is kind of like the government giving the alcoholic airlines a keg.

Quoting Bennett123 (Reply 9):
How about AS beating VX by providing a better product for the consumer.

When was the last time any airline in this country did that? How do we make a better pizza? Let's make it cheaper by removing the cheese.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineHatbutton From United States of America, joined Mar 2005, 1500 posts, RR: 14
Reply 13, posted (5 years 10 months 1 hour ago) and read 8183 times:



Quoting Charles79 (Reply 11):
What a concept huh? Having flown both AS and VX I'd fly VX hands down anytime--MUCH better product and service!

That's your opinion. Not everyone needs mood lighting or TVs. Sure they have good customer service right off the bat. Usually happens with new airlines minus unions. But try keeping it up for 75 years. AS decides to compete by offering customer service and a frequent flier program. And judging by the recent Freddie award for #1 frequent flier program and the JD Power and Associate award for highest customer satisfaction among network carriers...I'd hardly think AS has a problem "competing."

Why does everyone have to see this as AS crying wolf? I like the back and forth jabbing. It's some good ol competition in the press. But AS also wants to make sure the playing field is level regardless of how good you think the VX product is. You can argue the fairness about the competition all you want, but if they are ever in violation of the law (no matter how antiquated you think the law is, it's still the law that everyone else follows) then there is a problem.


User currently offlineAviators99 From United States of America, joined May 2008, 456 posts, RR: 0
Reply 14, posted (5 years 10 months ago) and read 8138 times:



Quoting DLPMMM (Reply 10):
Part of the investment contract with investment groups contained a clause that lets them get out of the investment and receive back their entire initial investment amount after a given period of time. That milestone is apparently about to be reached, and the USA investors have declared their intent to VX that they will exercise their option to get out of the investment (not surprising given the current economic environment).

VX must now find new USA citizens as investors to take the place of the original USA investors. VX has hired a USA investment bank as an advisor to help it find the required new USA investors.

Apparently AS wanted to make sure that the DOT was aware of the situation, and that the DOT would not turn a blind eye if VX exceeded the foreign ownership restrictions.

Did you read LAXintl's post above? The point is that the DOT would have never let VX fly if such a clause was written as you are led to believe above. DOT went through all of this stuff leading up to VX getting their operating certificate. None of the US investors can get out of their investment *unless* new investment is found.


User currently offlineAviators99 From United States of America, joined May 2008, 456 posts, RR: 0
Reply 15, posted (5 years 10 months ago) and read 8122 times:



Quoting Hatbutton (Reply 13):
And judging by the recent Freddie award for #1 frequent flier program and the JD Power and Associate award for highest customer satisfaction among network carriers...I'd hardly think AS has a problem "competing."

(bold added by me)

Well, that's great for AS, and probably deserved. However, it's a low bar to meet. There's a long way between best for network carriers and best for carriers, and that's what I'd like to see fixed (whether VX is around or not). My loyalty follows the quality of the product and service. It has nothing to do with price and convenience. Right now, I go SEA-SFO every 2 weeks at minimum, even though my business is very near to SJC. I go SEA-SFO-IAD often, instead of SEA-DCA, even though my business is in the district. Same goes for SEA-SFO-JFK as opposed to SEA-EWR. It's all for the service quality (particularly in F, for me, but I would do the same for Y). In my eyes, AS does have a problem competing with VX. It's not even close.


User currently offlineBMI727 From United States of America, joined Feb 2009, 15831 posts, RR: 27
Reply 16, posted (5 years 10 months ago) and read 8114 times:



Quoting Aviators99 (Reply 15):
However, it's a low bar to meet.

Being the best airline in America is kind of like being the healthiest person in intensive care. That said, AS was really very good and would fly on them again. Their employees went above and beyond to get our flight out on time. I enjoyed VX too, and I hate to see other airlines, especially VX, go try to get the feds to shut down Virgin. I'd much prefer that they take care of this in the air.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineStitch From United States of America, joined Jul 2005, 31412 posts, RR: 85
Reply 17, posted (5 years 10 months ago) and read 8108 times:
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Quoting Bennett123 (Reply 9):
How about AS beating VX by providing a better product for the consumer.

I fly AS a decent bit and they respond in lock-step with improvements and downgrades to First Class catering on their competitors. When UA upped their F game to LAX for awhile, AS matched them with improved service. On routes where AS competes with VX, AS has improved the level of their catering in First Class.

AS has always had great cabin crews, so that high standard has remained for decades regardless of staff attitudes at competing carriers.


User currently offlineBMI727 From United States of America, joined Feb 2009, 15831 posts, RR: 27
Reply 18, posted (5 years 10 months ago) and read 8079 times:



Quoting Stitch (Reply 17):
AS has always had great cabin crews,

True. Our crew for a SEA-SFO flight was delayed so they found another cabin crew that just finished up to come to our plane so we could go ahead and board and then leave as soon as our crew arrived.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3602 posts, RR: 10
Reply 19, posted (5 years 10 months ago) and read 8079 times:



Quoting Aviators99 (Reply 14):
Did you read LAXintl's post above?

Yes I did.

Quoting Aviators99 (Reply 14):
The point is that the DOT would have never let VX fly if such a clause was written as you are led to believe above.

Incorrect. As long as 75% voting and 51% ownership was in US citizen's hands, and control was deemed had by USA citizens, then DOT had no reason to deny an operating certificate. The CEO was removed because SRB and Virgin Group had originally hired him, making his "independence" from Virgin Group questionable in the DOT's eyes.

Quoting Aviators99 (Reply 14):
DOT went through all of this stuff leading up to VX getting their operating certificate.

Yes they did.

Quoting Aviators99 (Reply 14):
None of the US investors can get out of their investment *unless* new investment is found.

Or unless the airline is closed down and liquidated.


User currently offlineHatbutton From United States of America, joined Mar 2005, 1500 posts, RR: 14
Reply 20, posted (5 years 9 months 4 weeks 1 day 23 hours ago) and read 8018 times:



Quoting Aviators99 (Reply 15):
There's a long way between best for network carriers and best for carriers, and that's what I'd like to see fixed (whether VX is around or not). My loyalty follows the quality of the product and service.

Again that's your opinion. I prefer not to sit in a purple cabin while the person behind me constantly bangs on my seat because they don't realize that a touch screen doesn't need to be punched to get to work.

Quoting Aviators99 (Reply 15):
In my eyes, AS does have a problem competing with VX. It's not even close.

Well load factors don't agree yet with you right now even with VX's rock bottom fares.


User currently offlineAtomsareenough From United States of America, joined Feb 2008, 566 posts, RR: 2
Reply 21, posted (5 years 9 months 4 weeks 1 day 22 hours ago) and read 7947 times:



Quoting Hatbutton (Reply 13):
Sure they have good customer service right off the bat. Usually happens with new airlines minus unions. But try keeping it up for 75 years.

Sure, longevity is impressive and something to be respected when you're thinking in terms of history. But frankly, when it comes down to it, it doesn't matter one whit to me, as a passenger, that AS has been around for 5 years or 75 years. When I'm buying my ticket, I'm only thinking of who has the best combination of price and product *today*. So, 75 years from now, if I'm still around and travelling, and if VX (or AS or whatever airlines exist then) no longer has a good product, I'll get a ticket on another airline.


Hmm, I wonder what aircraft will look like in another 75 years...

Quoting DLPMMM (Reply 10):
Part of the investment contract with investment groups contained a clause that lets them get out of the investment and receive back their entire initial investment amount after a given period of time. That milestone is apparently about to be reached, and the USA investors have declared their intent to VX that they will exercise their option to get out of the investment (not surprising given the current economic environment).

It was my understanding (which could be mistaken, feel free to correct me if you know better) that the milestone already WAS reached, back in September or so, and the investors still have not pulled out. That makes it seem like the search for alternative investors is more of a due diligence/CYA move on the part of VX.


User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 22, posted (5 years 9 months 4 weeks 1 day 22 hours ago) and read 7889 times:



Quoting Hatbutton (Reply 13):
That's your opinion. Not everyone needs mood lighting or TVs. Sure they have good customer service right off the bat. Usually happens with new airlines minus unions. But try keeping it up for 75 years. AS decides to compete by offering customer service and a frequent flier program. And judging by the recent Freddie award for #1 frequent flier program and the JD Power and Associate award for highest customer satisfaction among network carriers...I'd hardly think AS has a problem "competing."

Well said.

I have never flown VX....flown on AS a few times, and will again shortly....but it really comes down to personal preference. The AS flights I have taken were excellent. I'll take warm, sincere service, a great FF program, and many flights to choose from over a swank looking disco cabin and a PTV. I really don't need a million channels of video to choose from on a flight....especially a shorter one. On a longer one, the Digiplayer works just fine. All that being said I'm sure VX has a great product and everything my friends tell me about them are words of praise...but in the end, you like who you like. Good for AS on this one. The airline has been a survivor, and I'd rather spend my money on a company which has a proven track record of good service for decades over the new kid on the block. But again, to each his/her own.


User currently offlineDLPMMM From United States of America, joined Apr 2005, 3602 posts, RR: 10
Reply 23, posted (5 years 9 months 4 weeks 1 day 21 hours ago) and read 7846 times:

Quoting Atomsareenough (Reply 21):
It was my understanding (which could be mistaken, feel free to correct me if you know better) that the milestone already WAS reached, back in September or so, and the investors still have not pulled out. That makes it seem like the search for alternative investors is more of a due diligence/CYA move on the part of VX.

I don't know the date of the milestone, but it is apparent from reports that Virgin Group thinks a back-out by the USA partners is quite possible.

From the Seattle Times:

The Financial Times reported last month that Virgin Group hired Lazard Ltd. to recruit new investors on concern that Cyrus Capital and Black Canyon might exercise an option to recall their initial investment in Virgin America. That would leave Virgin Group as the sole shareholder in the closely held carrier, the newspaper said, citing unidentified people familiar with the matter

Here's a link:

http://seattletimes.nwsource.com/htm...ce/2008768548_virginamerica21.html

Edited to add link.

[Edited 2009-02-24 10:56:52]

User currently offlineAviators99 From United States of America, joined May 2008, 456 posts, RR: 0
Reply 24, posted (5 years 9 months 4 weeks 1 day 21 hours ago) and read 7831 times:



Quoting DLPMMM (Reply 19):
Incorrect. As long as 75% voting and 51% ownership was in US citizen's hands, and control was deemed had by USA citizens, then DOT had no reason to deny an operating certificate. The CEO was removed because SRB and Virgin Group had originally hired him, making his "independence" from Virgin Group questionable in the DOT's eyes.

Apparently, you did not read LAXintl's post. The DOT approved them to fly, because the clause said specifically that the investors could not put back their shares unless other US citizens were in place to replace them. If it hadn't been written that way, the DOT would not have approved them to fly. In fact, I'll bet the DOT *wrote* that clause.


25 Lightsaber : Other startups have released their numbers. VX hiding losses and claiming they're doing better than they were... only invites more scrutiny. I'm all
26 Aviators99 : " target=_blank>http://seattletimes.nwsource.com/htm....html It doesn't matter! The supposition that investors backing out would leave Virgin Group a
27 Post contains links Atomsareenough : Actually, come to think of it, it was that Financial Times article which your article references that mentioned that the milestone had already passed
28 Par13del : I know its a simple answer, but if you compare to the auto industry, having foreign companies assemble cars in the US has not done much for the local
29 Atomsareenough : I'm sorry, but then how would one enter a market in a manner that adheres to your principles? By flying empty planes around simply hoping and praying
30 Alaska737 : When AS started up and down the west coast in the 80's they didn't have any teaser fares. They beat out UA with good old customer service...and maybe
31 Hatbutton : Oh man I forgot about that. What a crazy promotion.
32 Atomsareenough : But isn't it true that by then they'd also been around for 40 years, and had a stable Alaska/Northwest market to depend on, in which they were a domi
33 Ikramerica : Which is for two reasons: VX are losing money on the Seattle operation. AS must follow the funding rules. So let me get this straight. Because AS bel
34 Par13del : Does this not sound like product (fare) dumping, something which other industries have complained about? Promotional fares are allowed, the question
35 BMI727 : Because there is money to be made if you run a quality airline the right way. The auto industry went downhill when financial people wrestled the stee
36 Hatbutton : Airlines still offer introductory fares on new routes regardless of whatever else keeps them propped up. And AS was a literal unknown to the rest of
37 Alaska737 : Most didnt know of AS and those who did thought they were kind of a trashy and cheesy airline that was always late. Of course Ron Consgrave and Bruce
38 Aviators99 : This is ridiculous. The DOT made sure that VX cannot become a foreign carrier. It is 51% American owned, and is forced to stay that way---not only by
39 AirframeAS : I have to side with AS on this one. AS has the right to question their competitor's status quo at any time and AS did it responsibily. Actually, it i
40 Ikramerica : Nothing is impossible, my friend. Did I think it possible 1 year ago that we would be nationalizing any large banks, let alone Citibank? No. These ar
41 Lightsaber : I have no problem with launch teaser rates. VX has too many routes that are no longer launch routes with loss leader pricing. Let's take the opposite
42 Atomsareenough : Actually, I think Burlingame is in Jackie Speier's district (it used to be Tom Lantos, until he passed away a couple of years ago). SFO is operated b
43 AirframeAS : If you go to their website and look at their history...you'll see the days of McGee Aviation in the 1920's. So AS has been around 75+ years.... Why d
44 Pyrex : God, when will these stupid restrictions on "foreign ownership" die already? This isn't the 1930s anymore. Foreign companies can buy banks, utility co
45 Hatbutton : You also have a market that is horribly oversaturated. The US has half the population Europe does. That makes the markets in this country much more c
46 Atomsareenough : Yes, yes, the company was started 75+ years before 2009. It seems we're talking right past each other here. If you go back and read the thread a litt
47 AirframeAS : Point taken and noted. But McGee Aviation is still a part of their history regardless. I still see what you mean now....
48 Post contains links Atomsareenough : You're entitled to that opinion, but keep in mind that what you're saying is a subjective judgment. They may have a different idea about how long it
49 AirframeAS : But that is not the issue here. The issue is compliance being followed by VX and who is supposed to be making sure that this is being complied by.
50 Hatbutton : I agree. I guess I am just failing to see how and when they expect to make money anytime soon without further investments.
51 Atomsareenough : Yeah, that's not the issue with the petition by AS, but people were complaining about the "dumping" of seats at "loss leader" prices, and that's what
52 Lightsaber : I would call it dumping. But the question is, what is AA's break even point? You point out that $500 was when AA had a Monopoly and thus could expect
53 AirframeAS : Neither have I. I don't think AS has released their evidence to the public yet. They are probably more likely waiting to see how the DOT responds bef
54 LAXintl : Man amazing how so many of you guys all have your panties in a bunch. Let me throw two points out there: 1) As the DOT reply states, the VX ownership
55 LAXintl : For discussion sake what would you guys make of the following? 1) Rumors that Virgin Money USA(formed 2007, formerly CircleLending) is discussing with
56 DLPMMM : Please reread it yourself. It put nothing to rest. A statment by VX stating it's nothing to worry about does not make it a moot point. You do realize
57 Aviators99 : They don't simply state "it's nothing to worry about." They state *why* it's nothing to worry about. The DOT required language such that investors ca
58 AusA380 : As an Australian I always get a great kick out of these threads. Here is the country that purports to be the champion of the free economic community w
59 DLPMMM : Isn't Australia the country that recently denied SQ's 5th freedom rights to fly to the USA (whereas the USA had no problems with the flights). Pot...
60 Lightsaber : I'm ok with greater forign ownership rules as long as: 1. The US has an 'open-skies' agreement. 2. The ownership rules for all companies (in particul
61 Par13del : Well, if the US cannot produce any one smart enough to run an airline, you are going to have to bring in pilots, engineers, F/A also, as they jobs al
62 LAXintl : Agreed. I find it embarrassing that the foreign ownership rules in the US airline sector are so archaic to the point where its robbing US carriers of
63 Aviators99 : I don't even think proponents even bother to use the national security excuse anymore. Protectionism is alive and well...
64 Boeing6600 : That's nice but time and time again this theory of paying for the quality of product is shown to be wrong. We see over and over again that most ticke
65 Aerokiwi : Seems to me that those advocating even more scrutiny of VX's foreign ownership seem to fundamentally mistrust the DOT to do (or have done) their job.
66 Aviators99 : Have to say, although I agree it's a personal choice, I can't imagine that you've flown VX very much and still say that.
67 Post contains links Hatbutton : http://www.usatoday.com/travel/fligh...america_N.htm?loc=interstitialskip Another article on this posted in a new thread but deleted. Doesn't sound li
68 DLPMMM : Thank you for the update. Sounds like the scenario is as I thought in post 10 It appears that you are wrong, and the point is not moot. Would you car
69 Atomsareenough : True, that's what this article seems to say, but like I said in the now-deleted thread, it contradicts the Aviation Week article which said that Blac
70 Surfdog75 : Not a red herring at all. Think major world war. Airlines would be pressed into service immediately. The US shouldn't be at the mercy of some foreign
71 Aviators99 : Nope. It is still moot. The shareholders cannot put back their shares until additional investors are found. The DOT made that a condition of them get
72 LAXintl : An eventuality I cant anticipate as the economic incentives for airlines to fly for the DoD are so great. You might not realize however airlines were
73 Boeing6600 : Your right, I have only flown on them twice 2 round trips one SEA-SFO-SEA and one SEA-LAX-SEA. Both times I interacted with the gate agents who had m
74 Aviators99 : My experience on VX (99% the same routes as you, but every week or two since they launched SEA-SFO), has been different. I agree that the gate agents
75 Boeing6600 : Its good to hear that you have had a diffrent experiance than I. It would be interesting to hear your thoughts and see if they change any after flyin
76 Surfdog75 : Not saying I'm that worried about it but it's the government's job to be prepared for any eventuality. Foreign oil wouldn't be foreign that long in a
77 Aviators99 : Actually, I wasn't an MVP gold, as I banked all of my miles on CO. I am losing my CO Platinum this year and dropping down to CO Gold due to it, thoug
78 XT6Wagon : What makes VX special and undeserving of any kind of defense is that it was created NOT to be a viable airline bettering the existing carriers by bet
79 LAXintl : Crazy assumption. I dont see the Virgin Group, nor the well known US investors establishing a business to loose money on purpose. Ridiculous assumpti
80 AirframeAS : Yes, it is...as I have said in one of my posts above: It is the responsibility of AS and other airlines to make sure that the DOT is doing their job.
81 Post contains links Hatbutton : http://online.wsj.com/article/SB123663746387076621.html Looks like the investors sold back their shares and replacements have not been found. So I gue
82 Post contains links YVR1968 : Perhaps an even more critical story related to the viability of VX is this story: http://online.wsj.com/article/SB123663730876576603.html Despite the
83 Aviators99 : I'm betting that replacement investors were found.
84 Hatbutton : The article says there are none. Quote from the article: "After weeks of negotiations, the U.S. investors last week exercised their option to sell, a
85 Aviators99 : Including this part: Which I can't reconcile with the WSJ's "sources familiar". I'll take the word of the company here. I can't see them making an of
86 Hatbutton : I know. The article seems a little sketchy because every 2 sentences it says that line about "people familiar with the situation." But it is the WSJ
87 Aer : I thought the subject was foreign investment operating national airlines, not foreign carriers operating stopover flights.
88 Aviators99 : You're looking for The Civil Aeronautics Act of 1938. It's been a while since I've read it, but as I recall, the 25% financial limit is a hard number
89 Post contains links BigGSFO : David Cush addressed staff at VX HQ today: http://www.sfgate.com/cgi-bin/articl...03/10/BURR16CRAC.DTL&type=business
90 Post contains links Kohflot : " target=_blank>http://www.sfgate.com/cgi-bin/articl...iness Sort of reminds me of this..... http://www.wbir.com/news/local/story.aspx?storyid=20667
91 UA772IAD : While they do not have an index for VX, the American Consumer Satisfaction Index is the definitive benchmark on how buyers feel about business practi
92 UA772IAD : Most consumer studies will actually agree with this statement. I again cite the ACSI, who after studying trends for over a decade, found that offerin
93 MasseyBrown : Since the change in control was not initiated by the foreign owners, I would bet that there is a grace period, in practice if not in law, during whic
94 DavidByrne : This thread is just so amusing! Welcome to the implications of free enterprise, Americans. Sorry, forgot, you're the home of free enterprise . . . In
95 Hatbutton : I don't think anyone is saying they need to go out of business because they're product is too good. The point is that there are laws, whether or not
96 RedFlyer : From a customer-service standpoint, yes, US carriers are appalling. But then Americans seem to value low-cost air travel far more than any amenities
97 Aviators99 : Personally, I'd say it is customer service, live TV, multi-passenger interaction through the IFE (chat, games, etc), and wildly superior domestic F c
98 DLPMMM : Talk about Koolaid dirinkers, you won't even admit that VX has an ownership problem, dispite the obvious! Wildly superior F cabin?... you are showing
99 Aviators99 : I said "wildly superior domestic F cabin". I believe I have plenty of experience in this area. What's your beef with this statement? I don't think it
100 DLPMMM : I would say it is a gross overstatement. And obviously you will believe anything they tell you. If you do not believe they have an ownership problem
101 Aviators99 : How would you rate it, as compared to the rest? Please tell what you thought of it when you've flown. I think there's a large, material difference be
102 LAXintl : I also believe VX first class product far exceeds that of other US domestic F class products except possibly the AA/UA transcon F products. Simply to
103 DavidByrne : . . . .and what I'm reading is a whole lot of angst about the possibility that at some point in the future VX might be tempted to slide around the fo
104 Aviators99 : Well put, DavidByrne. I'll add that it's perfectly reasonable for AS to question VX's status. In fact, 14 CFR Part 204 says the following: (emphasis m
105 Hatbutton : Actually now that we have word that two US investors pulled out and had 77% of the capital funding...and no replacements have been found yet...this i
106 Post contains links LAXintl : But they have not - From the CEO interview only yesterday "The U.S. shareholders still own 76 percent of the operations of the company. They still si
107 Hatbutton : Well I know that's what he said. It is not "official" that the investors have pulled out. But the WSJ is a rather reliable source. It quoted that the
108 Aviators99 : I think the CEO is a bit more reliable than the WSJ's quote of "sources close to..." The CEO didn't only talk about board seats. He said that they st
109 Hatbutton : While I would agree...I still would like to see it proven and am curious what the DOT will actually do in regards to AS's request. Do they just come
110 DavidByrne : This I don't understand. An investor can't just "pull out" - the only way that they can cease to be an investor is to sell their shares to another pa
111 Aviators99 : According to reports (which I believe), the shareholder agreement contained a "put provision", which allowed them to put the shares back to the compa
112 Hatbutton : The option in the contract allowed them to sell back to their shares back to the Virgin Group. So in a sense, it is like pulling out. Maybe the sale
113 UA772IAD : I take it you don't care for VX... From an investment standpoint, however, they have actually been quite smart. Granted their government relations ar
114 Aviators99 : Wouldn't make sense to me that the shares would be put to the Virgin Group. More likely they would be put to VAI Partners.
115 Hatbutton : I wholeheartedly agree. It just seems without actually knowing what the terms were in that deal (if they couldn't sell shares unless replacements wer
116 Aviators99 : Personally, I think that if they were in violation, we would have heard about it by now. After all, as silly as it may seem, this particular law was
117 Kleiner : Remember, the US investors are still on the board. That was stated. So yes... ...but they may not have 75% of the financial control. Also, Cush said t
118 Aviators99 : The way I understand the law, it involves financial control as well as operational control. So, I can't reconcile Cush's statements without having bot
119 RedFlyer : Most of those can already be found in other US carriers (albeit not all of them in any one carrier). But VX is still new to the U.S. market and they
120 LAXintl : Spot on DOT has yet to even rule that they will even action the AS petition. But at the end of the day, they are under no obligations to make things
121 Post contains links Aviators99 : http://cbs5.com/video/?id=47391@kpix.dayport.com The first 30 seconds set the record straight.
122 Hatbutton : That was a good interview. I like that at about 4:45 he wasn't afraid to admit that at a few points they thought "what did we get ourselves into" whe
123 Aviators99 : I'll bet he got in trouble for saying that. It didn't really make sense when he added "...but we say that in private, behind closed doors." Like he w
124 Hatbutton : Haha yeah I kind of chuckled too. But then again, if any airline CEO last summer tries to tell you that they weren't sweating a little they are a lia
125 Aviators99 : Where it really hurts AS (and everyone else) are these crazy fare wars. I can't imagine that $48 SEA-SFO can make money.
126 Live2fly83 : VX is pushing the "76%" thin very hard but is only refers to VOTING and operations rights correct? I have yet to see Cush and VX state CAPITAL is stil
127 LAXintl : Voting control can only be 25% foreign. However equity can be up to 49% foreign. Two very different things.
128 Hatbutton : Are you sure? I thought it was 25 all around. When VX finally got the green light a couple years ago it was because Black Canyon and Cyrus bumped up
129 Ikramerica : Please. New Zealand and Australia have a specific bi-lateral arrangement that benefits both parties to allow this. Please show me the EK, SQ, AF, etc
130 Post contains links LAXintl : You can read about it in a policy paper written by United Airlines executive in 2003 for ICAO. Liberalizing U.S. Foreign Ownership Restrictions www.i
131 Post contains links Hatbutton : Thanks I was trying to find something on it but didn't know where to look and couldn't find anything concrete. I'm still a little confused because th
132 Live2fly83 : right, my point exactly I ask the question again: VX is stating voting rights are inline with DOT but what about equity now with SRB majority??
133 N801NW : You could split the stock into "common" and "preferred" shares. For example, class "A" common shares have one vote per share while "B" preferred shar
134 Hatbutton : Ok that makes sense. Thanks.
135 LAXintl : Yes, there are dozens of ways to structure deals, and not all stocks or warrants are created equal. (for example just ask anyone participating in com
136 Aviators99 : I fly CO 752 F regularly, and VX F constantly. CO is not even close. When you talk about UA 752, I assume you mean the PS product in particular? If s
137 EIPremier : AS has a right to question VX ownership and make sure they are being held to the same rules as everyone else. I personally don't agree with the 75% vo
138 EA CO AS : AS never said powerports would be installed - not on the 738s, nor on the rest of the fleet. In fact, they'd argued against the idea every time it wa
139 Aviators99 : I used Row 44 last week on AS. It worked very well. In practice, it was equal in connection speed and reliability to GoGo on VX.
140 Post contains links Hatbutton : http://www.travelweekly.com/article3_ektid191652.aspx Looks like the road to more foreign ownership in US airlines is going to get a little more diffi
141 Ikramerica : Nanci Pelosi is already trying to bend rules for companies in her district. She is pushing for an exception for the SF Chronicle to be allowed to have
142 Socalatc : How does VX provide " Vital" Transportation? Every destination VX operates to is very well served by other airlines, the only thing VX is doing is lo
143 Ikramerica : They don't. But when has the truth ever stopped a politician?
144 Aviators99 : This thread is full of "straw man" arguments. VX never asked to break the rules. They only said they are following them.
145 MasseyBrown : Tuesday ALPA and AFA filed in support of Alaska Airlines asking DOT to issue a show cause order concluding that VX is not an American citizen. I'm not
146 Atomsareenough : ... And the flip side of this statement is that "the only thing other airlines are doing is lowering yields so VX can't make money on their routes".
147 MasseyBrown : Virgin America, today filed a response to Alaska, saying "As the Department is well aware, no sale or transfer of the 75% U.S. citizen controlling equ
148 Aviators99 : Would you mind repeating the link? I can't seem to find it.
149 Post contains links Atomsareenough : You can find the whole docket here: http://www.regulations.gov/search/se...DOT-OST-2009-0037&sid=1203FD16A2F4 ...Or if that doesn't work, you can go
150 Post contains links MasseyBrown : http://www.regulations.gov/fdmspubli...=DocumentDetail&o=090000648092b92b Click on the Adobe icon to open the document.
151 EA CO AS : Um, last I checked, VX was the one introducing ridiculous no-advance $39.00 SFO-SEA and $59.00 LAX-SEA fares. So you may want to check yourself when
152 Post contains images Atomsareenough :    Dude, I wasn't trying to say that ANYONE was responsible for trashing yields. My whole point is that "boo hoo, ABC carrier is trashing yields!"
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