18th May 2007

California's Newest Airline is a Virgin

Travellers to and from the Bay Area will soon get more choice as the country's latest low-fare airline is getting ready for take-off from San Francisco. A big hurdle was just taken when the U.S. Department cleared the airline to fly.

The U.S. Department of Transportation today announced that it has issued an order granting Virgin America Airlines the authority to begin operation as a U.S. carrier, after the company agreed to take steps needed to meet airline requirements. This order means that once Virgin America receives the necessary safety permits from the Federal Aviation Administration and implements the changes it has agreed to make, the company is cleared to begin flying.

"We are absolutely thrilled to be cleared for take-off and for the opportunity to serve San Francisco, the Bay Area, California, and the American public," said Virgin America CEO Fred Reid.

In its final order, the DOT found that the company fully complied with all requirements regarding fitness, U.S. citizenship requirements and control. The DOT also acknowledged that this final approval had been contingent upon the Company's acceptance of several additional conditions that were made public in March when the DOT tentatively approved Virgin America's application.

One of these additional conditions included a requirement for Mr Reid to step down following launch. That condition will remain although he now will be permitted to stay on as CEO for six months following airline certification.

"This has been quite a journey but I'm truly happy that we will be able to launch our airline. I plan to spend every minute of my time between now and then supporting my 200-plus talented teammates in that endeavor," said Mr Reid. "When I said that this was never about one person, I meant it. Virgin America has a wonderful team who will take this airline to great heights, bringing exciting innovation and competition."

Now that the company has been formally approved, the next step will be to seek a waiver to start selling tickets. The company is planning a mid-summer launch.

Virgin America's first flights will be between its home base of San Francisco (SFO) to New York (JFK). The airline also plans to serve Los Angeles (LAX), Washington/Dulles, San Diego and Las Vegas within its first year of operations.

The airline expects to serve as many as 10 cities within a year of operation and up to 30 cities within five years of service.