DOT Reviewing Virgin America Proposed Transactions

In February, Alaska Airlines, a subsidiary of Seattle-based Alaska Air Group Inc., asked the government to determine whether Virgin America continues to meet the qualifications for being a U.S. air carrier. It cited media reports that called into question Virgin America's compliance with U.S. foreign ownership and control restrictions on domestic carriers.

Alaska Airlines later asked the DOT to issue an order tentatively finding that Virgin America no longer qualifies as a U.S. carrier.

Some analysts say Alaska Airlines and United Airlines would stand to gain if Burlingame, Calif.-based Virgin America, which flies mainly transcontinental routes, were to cease operations temporarily or permanently.

In March, Virgin America's top executive denied that a foreign entity is holding more than 25 percent of the carrier's voting shares, and he insisted the fledgling airline remained in compliance with U.S. citizenship rules. The Virgin Group, which is controlled by British billionaire Richard Branson, is a minority holder in Virgin America, the airline has said.

The DOT had said little about the hubbub over Virgin America's citizenship status until the Kienitz letter.

Kienitz told Oberstar that he could not comment on the merits of Alaska Airlines' petition or the responses filed by other interested parties.