DOT Stalls Virgin's Domestic U.S. StartupBritish billionaire Richard Branson's effort to expand his Virgin brand to include domestic flights within the United States has hit a regulatory snag. The U.S. Department of Transportation on April 13 asked for more information about the venture's ownership structure to ensure it is at least 75 percent owned by U.S. investors as required by law. Virgin America Inc. is partially owned by Branson's Virgin Group Ltd., which already operates transatlantic flights to North America. Virgin had hoped to begin flights by summer, including some transcontinental legs. The Department of Transportation review, which requires Branson to turn over all documents related to the company's formation, was prompted by labor unions and such would-be rival airlines, as Continental, American and Delta. Among other things, the Department of Transportation order seeks any documents exchanged between Branson and the U.S. operation. It also asks Virgin America to "describe in detail" Branson's relationship with Fred Reid, the American unit's chief executive officer. Reid, in a statement April 13, said he believes "our application is fully complaint with existing U.S. law." Virgin America said it is 75 percent owned by a group of U.S. investment firms, such as Black Canyon Capital and Cyrus Capital Partners. Branson's Virgin Group owns the other quarter, the airline said. U.S. regulators didn't set a timetable for a decision on the matter. Virgin America said it could begin flying within three months of an approval.
GSA Issues Government Data-Capture RFPThe federal General Services Administration last month, as part of the ongoing effort to deploy an end-to-end travel management process for hundreds of federal agencies, created and invited comments on a draft request for proposals for technology that would allow it to consolidate and report travel data. The draft RFP covers both GSA's ETravel program
(BTN, Sept. 20, 2004) and the Department of Defense's oft-criticized Defense Travel System
(BTNonline, Sept. 30, 2005). GSA created the RFP with the intention of awarding contracts for a one-year period with four additional one-year options. Comments on the draft RFP were due April 26. Although the House of Representatives last year cut off ETravel program funding in its version of the fiscal 2006 Transportation, Treasury and Independent Agencies appropriations bill
(BTN, July 18, 2005), the version signed into law by President Bush allows funding, providing no less than 23 percent of all subcontracted dollars are allocated to small businesses.
Senate Blocks Airline Ownership Rule ChangeThe U.S. Senate Appropriations Committee voted to block a Bush administration rule that would make it easier for foreign investors to operate U.S. airlines, putting in jeopardy a pending aviation agreement between the U.S. and the European Union. The panel amended an emergency spending bill intended to pay for Iraq war operations and Gulf Coast cleanup with the provision, which bars implementation of the rule until at least Sept. 30. The provision would have to gain approval of the full Senate and the House of Representatives and be signed by President Bush to take effect. It was the first legislative movement to stop the proposal, which would give foreign investors more say in how U.S. airlines operate. Lawmakers have expressed concern that such a change would lead to reduced airline service to remote areas and stop a program where U.S. troops fly on civilian aircraft. The Bush administration wants to give foreign investors more input on where to fly and what planes to buy as part of a tentative Open Skies agreement that would increase flights between the United States and Europe. European governments said they want the foreign ownership limits reduced in the United States before finalizing that accord. Hawaii Senator Daniel Inouye, the top Democrat on the committee, said lawmakers have "too many questions still unanswered" about the proposed changes. Transportation Secretary Norman Mineta said he's in talks with the senators to reach an acceptable compromise.