Virgin America Finally Gets A Break: Airline May Fly By Summer

The Transportation Department gave a partial green light today to the start up of Virgin Atlantic, the San Francisco-based, discount airline that has been trying to fly for more than a year now.  In December,  Washington regulators, helped along by pressure from American, Continental and Delta Air Lines, decreed that Virgin Atlantic didn't comply with federal regulations regarding the ownership of US airlines by foreigners.

Virgin Atlantic, of course, is Richard Branson's London-based airline, but he said he and his overseas companies did not exceed the ownership cap of 25 per cent in Virgin America.  Still, Virgin America made some concessions, issuing more stock, shedding three board members associated with Branson's Virgin Group, and--for reasons not quite clear to me--expressing a willingness to fire CEO Fred Reid, an American.

Virgin America's web site tonight says the airline hopes to begin flying to New York City by mid-summer, with flights to DC, Las Vegas, and San Diego beginning within nine months after the airline's inaugural flight.  Virgin America will be the first major discount airline to serve San Francisco's major airport (Southwest flies in and out of nearby Oakland), so expect fares on the new airline's competitors to drop the day Virgin Atlantic begins service.