Peninsula fears loss of jobs, tax revenue if Virgin rejected

Local officials expressed anger and concern at the news that Virgin America expects its application to start flying to be rejected as early as this week by the U.S. Department of Transportation.

Losing the long-planned airline would be a significant blow to the region, especially to Burlingame, where Virgin America is headquartered. The Bay Area might find itself with 3,000 fewer jobs, a $140 million annual salary loss, a $240 million business revenue loss and a $24 million loss in state and local taxes, according to a Bay Area Economic Forum analysis.

“It seems as if politics are playing a large role here when they

shouldn’t,” San Mateo County Board of Supervisors President Jerry Hill said. “It seems as if the established airlines have filed complaints in order to thwart competition. When politics interferes with the spirit of American competition, no one wins.”

At issue in the Department of Transportation application is whether or not British billionaire Richard Branson, who owns 25 percent of the fledgling airline’s stock, is in “actual control.”

“If there is a real possibility that Virgin America will not be allowed to fly, that would be a big disappointment locally,” Burlingame Mayor Terry Nagel said. Virgin is currently scheduled to operate 40 to 50 flights a day out of San Francisco International Airport by March.

The Virgin America case is seen as particularly sensitive because the U.S. is pressing for an “Open Skies’’ agreement with the European Union to lift decades-old flight limits, particularly at London’s popular Heathrow Airport.

Virgin Chief Executive Officer Fred Reid warned Friday that it was “theoretically possible’’ that the federal denial could force Virgin America to give up, despite its start-up investment of more than $200 million. However, he held out hope the Transportation Department might simply require corrective steps the airline could comply with next year.

Virgin America already has 169 employees and nine planes, with 33 more on order.

Wire services contributed to this report.

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