History[edit] In early 2004, Virgin Group announced its intent to start a new, United States-based, low-fare airline it named "Virgin USA". At the time, Virgin

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History[edit]

In early 2004, Virgin Group announced its intent to start a new, United States-based, low-fare airline it named "Virgin USA". At the time, Virgin USA expected flights to begin by mid-2005. After considering several key areas, the San Francisco Bay Area was picked to be the location of its flight operations center, and later its corporate headquarters.[8] The airline also changed its name from "Virgin USA" to "Virgin America". Because it had trouble finding U.S. investors willing to gamble on a new airline, given the state of the already crowded U.S. airline industry, the launch date was pushed back from mid-2005 to early 2006.[9]
Opposition and setbacks[edit]
Virgin America secured its first amount of funding in late 2005 and submitted the required U.S. Department of Transportation (DOT) certificate application.[10] The approval process was filled with debate from the support and opposition of the new airline. City and state representatives from California and New York led the support for the airline. The biggest opposition came from the Air Line Pilots Association (a national aviation labor union) and existing competitor U.S. airlines led by Houston-based Continental Airlines. The review of Virgin America's application was prolonged because of this opposition, which claimed Virgin America would not be under U.S. ownership or control.[11] The application was denied by the Department of Transportation on December 27, 2006.[12]
In order to achieve the necessary approval, Virgin America proposed a restructuring of the airline: voting shares would be held by a DOT-approved trust and only two Virgin Group directors would be on the eight-person board. In addition, Virgin Ame