Virgin America Prepares to Enter US Airline Market

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Virgin America Gets Closer To Start of Passenger Flights in U.S

• Summary: The Department of Transport rejected a request from rival carriers to freeze the approval process for Virgin America's launch of US passenger flights and investigate its ownership structure. Federal rules limit foreign ownership of US airlines, but rival airlines led by Continental contend that billionaire Richard Branson might play a larger role than Virgin America's structure suggests. Virgin Atlantic's CEO said that he is cautiously optimistic that Virgin America will receive approval soon. Virgin America has placed firm orders for 34 Airbus A320s, secured $177.3 million in financing, and is undergoing standard review of its crew training procedures by the FAA.
• Comment on related stocks/ETFs: Incrementally negative for US airlines Continental (CAL), American -- owned by AMR (AMR), JetBlue (JBLU), Airtran (AAI), US Airways (LCC), and Southwest Airlines (LUV).