Virgin America celebrates new plane

Party could signal movement on FAA requirements

Though still waiting after nearly a year for federal Department of Transportation approval to fly, Burlingame low-cost airline startup Virgin America will hold a high-profile debutante party for a new plane today at San Francisco International Airport. The arrival could show movement on the company’s federal licensing requirements.

The event will be the “christening” of an Airbus A320, one of 34 A319s and A320s ordered by Virgin America. Grace Slick, lead singer for the 1960s rock band Jefferson Airplane, will feature prominently in the festivities. San Francisco Mayor Gavin Newsom and California Gov. Arnold Schwarzenegger are both expected to attend.

Virgin America has been waiting since December for DOT approval to begin carrying customers, creating an aviation anticlimax after San Francisco and Peninsula government and business groups ardently wooed the airline to set up shop in the Bay Area. The startup process has been delayed by a motion filed by a competitor, Continental Airlines Inc. (CAL), with the support of several other airlines and air industry unions. The protestors complained that Virgin America may not meet the legal requirement of U.S. ownership, a charge the airline disputes. The airline is majority-owned by U.S. investors represented by Mark Lanigan of Black Canyon Capital LLC of Los Angeles and Nicholas Singer of Cyrus Capital Partners LLP in New York. It is minority owned by companies controlled by British billionaire Sir Richard Branson, whose companies are also licensing the Virgin brand to the airline and providing pre-startup debt financing.

“I guess they’re confident that they’re going to be OK,” said airline analyst Raymond Neidl of Calyon Securities Inc.

DOT spokesman Bill Mosley had no comment on Virgin America’s application, beyond saying it is still pending. But the plane’s arrival could signal movement on a concurrent licensing requirement with the Federal Aviation Administration. The airline is required to perform demonstration flights and evacuation procedures with its own aircraft before receiving FAA approval, FAA spokeswoman Laura Brown said. Those tests are scheduled for “within the next few months,” she said.

“We’re working on it concurrently with DOT doing their review,” Brown said.

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