The U.S. Department of Transportation late Friday allowed Richard Branson's Virgin Group to begin operations low-cost flights from a San Francisco base, following months of negotiations as to the carrier's compliance with U.S. laws governing foreign ownership of domestic carriers.
DOT in March tentatively had approved the Virgin America venture after Virgin agreed to replace CEO Fred Reid, who the government saw as too close to foreign investors and loosen parent company control, such as the ability to veto certain contracts and spending.
Virgin America said Reid will step down after the carrier launches, but said he be permitted to stay on as CEO for six months following the airline's certification.
"It's tough to think of a company that has done as much to meet our standards for becoming a commercial airline," said DOT Secretary Mary Peters. "Anyone who has doubts about the future of commercial aviation in this country should take a close look at one company's efforts to compete."
Virgin America plans to launch its inaugural service between San Francisco and New York's John F. Kennedy International Airport this year
(BTN, March 5), and expects to serve as many as 10 cities within a year of operation and up to 30 cities within five years of service.