Virgin America Tries Ignoring the DOT

Government Regulation, Virgin America
You’d think that after such a strongly worded denial by the DOT last week, Virgin America would work on addressing the issues at hand, right?

Wrong.

Instead of trying to fix the foreign control problems that sunk their application, they’ve decided to take their fight to the public instead. According this Forbes article, next week is the beginning of a massive PR blitz called “Let VA Fly,” or something along those lines.

Despite DOT objections that seem perfectly rationale in regards to the ownership structure and the brand license agreement, Fred Reid, CEO of the airline has decided to ignore that completely. Instead, he says “They don’t have a highfalutin problem with foreign equity. They’re opportunistically killing the competition.”

Highfalutin? Riiiiiiiight.

So now next week they’ll launch letVAfly.com (it redirects to their home page now). This site will allow people to sign petitions that will go to Congress. They’ll also go viral in their attempt to gain sympathy by going to social media sites. I’m not sure what that means practically, but we’ll find out soon enough. There is a plan to allow sneak peaks of their interiors that I imagine will make its way on to YouTube very quickly.

This strategy seems painfully bad to me. The DOT has ruled that there are ownership concerns. The only way Congress is going to change that ruling is by allowing increased foreign ownership and that’s not going to happen in the near future. This campaign is only likely to anger people in Washington. I’d say that by ignoring the valid concerns of the DOT and trying to turn it against them is one of the worst ideas I’ve seen in a long time.

Not only are they trying to turn it against the DOT, they’ve decided to pretend like nothing happened and go right on spending money. Today, they announced that the airline will offer DISH Network at every seat. Talk about rearranging deck chairs on the Titanic. . . .

Personally, I don’t have a problem with increased foreign ownership, and I’d be happy if these guys were allowed to fly, but that’s not the issue here. The laws are clear and the DOT ruled based on those laws. Putting pictures on YouTube is only going to make it worse.

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4 comments on “Virgin America Tries Ignoring the DOT

  1. It sounds like you are an avid flyer and I really think you will have a different opinion when you see the interior of the planes and what they have to offer when letVAfly.com goes live. Virgin America truly will revolutionize the airline industry…if the DOT will let them.

  2. As an aviation dork, you may be ignorant of the abuse of legal process by which truly awful US airlines have encouraged a perverse and non-final decision by the regulator. If sustained this decision will deny consumers the benefit of the competition that makes air travel in Europe cheaper and better than the in US. You cannot, however, be unaware that the US carriers who oppose the application have failed to deliver acceptable returns to shareholders since deregulation in 1975, while delivering a lamentable experience for the victims they call passengers. Sign the petition, and hope for something better!

  3. Though Virgin America clearly wants everyone to think that the “truly awful” US airlines are responsible for their problems, I think that’s hardly the case. (Do you work for Virgin America, John?)

    The DOT hasn’t taken longer to review the Virgin America case than it has others in recent memory. While I have no doubt that the US carriers did as much as they could to help pick apart the application and point out flaws to the DOT, I think there were some very serious flaws in the application itself and that is why it was initially denied.

    It’s quite true that US airlines haven’t delivered acceptable returns to shareholders since deregulation (in 1978, not 1975), but what exactly is it that makes you think that additional competition is going to change that? If anything, more competition and more capacity means worse returns for everyone.

    You say that preventing Virgin America from flying will “deny consumers the benefit of the competition that makes air travel in Europe cheaper and better than the in [sic] US.” While air travel in Europe may be cheaper than in the US, that is mostly due to the different style of airline. The Ryanairs and Easyjets of the world may let you on board for a few euro, but you’ll be paying for everything else once you get there. That combined with seat pitch that is generally 2 to 3 inches less than the standard in the US makes it hard for me to agree that air travel is better in Europe.

    Even if we were to agree that air travel is better in Europe, there’s nothing stopping 75% controlled American companies from starting up and doing the same thing here in the US. SkyBus is a perfect example of an airline that is going to bring Ryanair style pricing and service to the US market with very large ambitions. If competition were the main concern, SkyBus would never have received approval to fly.

    Virgin America’s problems are not due to anticompetitive practices. They’re due to the initial application not having met the requirements of the law.

    I do hope the airline is allowed to fly but only if it complies with the regulations that need to be followed. They may be considered unfair, but those are the current laws and they aren’t changing anytime soon.

    Signing the petition isn’t going to do anything. Fixing the application is what will ultimtely decide the airline’s fate.

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