DOT says Virgin America is US-controlled airline

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ATLANTA (AP) — The Transportation Department has rejected an Alaska Airlines challenge to the U.S. citizenship status of privately held carrier Virgin America.

The agency said Friday that Virgin America remains a U.S. citizen.

Under U.S. law, foreign ownership in a U.S. air carrier is limited to 25 percent of the voting interest in the carrier.

The Virgin Group, controlled by British billionaire Richard Branson, is a minority holder in Virgin America.

Virgin America, based in Burlingame, Calif., has agreed to ensure that it will get new investments of capital from entities other than the Virgin Group. It also will add another U.S. citizen to its board.

Some analysts said Alaska Airlines and United Airlines would have stood to gain if Virgin America were to fold.