Will Virgin’s deal open skies?
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Will Virgin’s deal open skies?
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MARK AUSTIN THOMAS: The boss of Virgin Atlantic, British entrepreneur Sir Richard Branson, could soon get the go-ahead to launch an airline in the U.S. The department of transportation has just given the carrier its tentative approval. From London, Stephen Beard reports.
STEPHEN BEARD: Branson has been trying to launch a low-cost domestic carrier in the U.S. for years, but he’s fallen foul of America’s foreign ownership laws.
Now, in a surprise move, U.S. transportation officials have ruled that Branson’s Virgin America can take off subject to certain conditions.
The current chief executive Fred Reid will have to go and Branson’s shares in the airline will have to be put in a U.S. trust. Fund manger Justin Urquart-Stewart thinks Branson will comply and this will be a blow for free trade.
JUSTIN URQUART-STEWART: It will be good to be able to show that you can have overseas airlines operating in the States. And we get away from some of the protectionist attitudes that we’ve seen that “Johnny Foreigner” is actually running airlines in America is a bad thing.
He believes the U.S. concession is designed to reduce European opposition to a treaty to open up transatlantic air travel.
E.U. transport ministers vote on the so-called Open Skies Treaty tomorrow.
In London, this is Stephen Beard for Marketplace.
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