A Virgin to Competition
The extensive list of amenities that Virgin America provides combined with its low fares shake the foundation of competitors all over the country. This rumbling has caused some early friction between future airline contenders, resulting in a battle for the sky.
Even before Virgin America’s first flight, the competition was becoming restless. Delta Airlines, Continental Airlines, and several other U.S. based airlines felt that this British based company, coupled with billionaire Richard Branson, was infringing on foreign U.S. territory. The airlines put up a fight stating that Virgin America was exceeding the federal restriction for foreign control of a U.S. airline at 25%. In simpler terms, Virgin America must be 75% owned by U.S. shareholders in order for it to be a U.S. competitor according to the U.S. Department of Transportation. The company responded by affirming that it will make a genuine effort to sell an increasing number of stocks to U.S. investors, and as a result of these sharp glances, is also forcing Virgin America’s chief executive, Fred Reid, to step down in November.
This “domestic” feud between airlines looks like preliminary anxiety to the future success of the already flourishing Virgin Atlantic Airlines. Although Branson has experience running his own business back in the UK, a new face representing Virgin America might result in an immature company that can’t hold a candle to the big boys of the U.S. It’s up to this novice airline to hold its own on the runway.