Alaska Airlines, which would love to get Virgin America out of its hair, has asked the US government to investigate whether the airline still has 75% US ownership, as required by federal regulations. The airline has received cash from investors recently (see Cranky’s post here for some detail around VA’s less-than-stellar financial situation), and Alaska seems to think that foreign investment has pushed VA’s foreign ownership levels too far. Perhaps.
Alaska has been annoyed/unhappy with the new airline since VA told the government that it did not want to have to file financial data with the government (as all US airlines are required to do). Alaska, which had been filing and, hence, giving VA a lot of competitive data to work with, found that request to be ridiculous. The government recently told VA to release their financials, which they’ve done.
Virgin America was also conceived as a transcon-focused airline (as evidenced by their cushy product), but for various reasons (competitive situation, fuel) they have built out a West Coast network right in Alaska’s backyard. To get people on these new flights, VA has offered fare sale after fare sale, dragging down average fares for the airline and for competitors, which is another reason Alaska isn’t too thrilled.
I don’t actually expect the government to shut VA down over the ownership issue, but it just shows the behind-the-scenes barking that VA has faced since the idea of the airline was first announced.