=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2007/03/21/MNGRUOOVA7= 1.DTL --------------------------------------------------------------------- Wednesday, March 21, 2007 (SF Chronicle) STARTUP AIRLINE REVVING UP ITS ENGINES/SFO-based Virgin America gets tentat= ive approval from U.S. regulators to start flying David Armstrong, Chronicle Staff Writer After nearly three grinding years of delays, Virgin America Airlines, the Burlingame low-fare startup, moved closer to takeoff Tuesday, potentially bringing more competition, lower fares and up to 3,000 new jobs to the Bay Area. The airline won tentative approval from the Transportation Department for its application to begin flying. If Virgin America receives final approval, it will use San Francisco International Airport as its base. This comes on the heels of recent decisions by fellow discounters JetBlue Airways to begin service at SFO on May 3 and Southwest Airlines to return to SFO this fall. The three low-fare airlines have not announced all of their routes, but they are likely to give Bay Area residents more frequent flights and lower fares to Southern California, Las Vegas and the East Coast. Operations could finally begin this summer for Virgin America, which pla= ns to begin flying between San Francisco International Airport and New York City's John F. Kennedy International Airport on the low-fare model pioneered by Southwest. The airline plans to fly Airbus 319s and 320s out of the International Terminal and says it will also open service from Los Angeles, San Diego, Las Vegas and Washington, D.C., in the first nine months of operation. Virgin America has said it plans to hire up to 3,000 employees, many of them in the Bay Area, where thousands of workers once employed by downsizing major carriers have been forced out of the aviation industry. The company has reportedly raised $177 million in financing for the operation. "We're very excited to hear that, and we're looking forward to working with them this summer," SFO spokesman Michael McCarron said Tuesday. "Hopefully, in the next several weeks we'll see a schedule. There are several different scenarios. We'll have to see which one plays out." Virgin American pronounced itself pleased by the encouraging news. "Today's order puts us one giant step closer to flying," said Virgin America spokesman Gareth Edmondson-Jones. "We look forward to getting our wings. It will be a huge win for our employees, investors, supporters and the traveling public." In keeping with the long-running approval process, there are several remaining catches, spelled out in the Department of Transportation's ruling. Chief among them: Virgin America Chief Executive Officer Fred Reid must step down to comply with rules requiring that "actual control" of a U.S. airline be in the hands of U.S. citizens. Reid is American, but he was hired by British entrepreneur Richard Branson, who dreamed up the idea for Virgin America and gave it its name, and whose London company, Virgin Group Ltd., owns 25 percent of its stock. Reid did not address his status immediately after the department ruling, which specified that he could stay on as a consultant to Virgin America for six months. The department also specified that Virgin America "provide advance notice to the department should the carrier get additional loans from non-U.S. investors." These are evidently the main final steps for Virgin America, which reconfigured its ownership and board of directors after the department rejected its original application in December. In late January, the airline added former Transportation Secretary Samuel Skinner, who held the post under former President George H.W. Bush, to its board. Reid said Tuesday in a prepared statement, "We worked very hard to addre= ss the department's initial concerns, and are pleased that they have recognized our extensive work and good-faith commitment to meet and exceed those requirements. We plan to meet with our shareholders immediately to address the department's proposed conditions." Virgin America is headquartered near San Francisco International Airport. It was lured to the Bay Area in 2004 by some $10 million in state job-training funds. It now employs about 170 people. The airline has received strong continuing backing from Gov. Arnold Schwarzenegger, San Mateo County officials and San Francisco Mayor Gavin Newsom, who lobbied to bring the carrier to SFO, a popular airport for long-haul international travelers that was largely left out during recent boom times for domestic low-fare airlines. "I am pleased that Virgin America has almost completed the DOT (Departme= nt of Transportation) application process and hope to see their planes at SFO later this year," Newsom said. "With their headquarters based in California, their airline will bring substantial economic benefits to San Francisco International Airport, in addition to creating jobs for the region and providing travelers with more choices when selecting carriers." Schwarzenegger also applauded the Transportation Department's action. "Their entry into the California marketplace would be a historic opportunity to bring innovative service and competition to consumers here and elsewhere in the country," he said. "Once again, California is leading the way by being the first state in quite some time to launch a new national airline that will help improve our nation's economy." Opponents of the decision have 21 days to appeal. They include several major carriers such as Continental Airlines, which contend that Virgin America is still foreign-controlled. Another discordant note came from the Association of Flight Attendants. = It was upset by Bush administration plans, rescinded in the face of congressional opposition, that would have allowed foreign investors to have more say in the operation of U.S. carriers, and a tentative agreement on a new "open skies" plan to allow European carriers to fly anywhere in the United States in return for open access to airports in the European Union for American carriers. "The DOT assertion that its approval of Virgin America's application mee= ts the tenets of U.S. aviation law is yet another corporate-backed sham supported by the Bush administration," said union President Greg Davidowitch. Virgin America's flight plans -- The low-fare startup could start flights from SFO to John F. Kennedy International Airport as early as this summer. -- The carrier will hire as many as 3,000 employees. -- The airline, with its headquarters in Burlingame, would be the first national airline based in California. -- The addition of Virgin America helps SFO increase its flights by discount carriers, including Southwest and JetBlue. E-mail David Armstrong at davidarmstrong@xxxxxxxxxxxxxxxx --------------= -------------------------------------------------------- Copyright 2007 SF Chronicle <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". 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