The Wall Street Journal is reporting that the two funds that owned 77% of Virgin America have exercised their right to sell their stakes back to the Virgin Group, getting back an 8% return (plus their initial capital) on their investment. Nice deal.
Why does this matter? Because US airlines are required to have US interests controlling at least 75% of the company. Virgin America has not found a new investor for the 77% of the company that was sold to Virgin Group, meaning that it is at least almost entirely controlled by a foreign entity (they argue that because the original investors remain on the board without a financial stake, that they still have 77% US control. Good luck selling that to the DoT.)
Will hte US shut them down tomorrow? No. But given how much difficulty they had getting approval when they launched, this could prove to be a very real problem in 2009. And with airlines (and the state of the industry) where it is, finding an investor or buyer will provide to be incredibly difficult.