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US regulators uphold Virgin America’s citizenship

Regulators at the US Department of Transportation (DOT) have ruled that Virgin America's US citizenship will remain intact now that the carrier has agreed to changes that will uphold rules that require US citizens to hold 75% of an air carrier's voting stock.

DOT launched a probe into Virgin America's citizenship last year after the carrier informed the agency of a "significant potential shift in its shareholder makeup", the regulator says.

The agency was also prodded by Virgin America's rival Alaska Airlines to conduct the review.

In the decision issued today the agency says it has dismissed petitions by Alaska and the Aircraft Mechanics Fraternal Association for a public inquiry into Virgin America's citizenship.

Ownership questions plagued Virgin America prior to its start-up in 2007, which culminated in its first CEO Fred Reid agreeing to vacate that role to ensure the carrier's launch. Regulators eventually became satisfied with the original ownership structure, which included UK-based Virgin Group holding a 25% stake in the carrier.

DOT explains that the changes agreed by Virgin America include a provision that ensures new capital investments from entities other than the Virgin Group can be obtained.

Virgin America has also agreed to add another US citizen to its board of directors, which will result in seven citizen designees as voting members of the nine-member board.

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