Branson Seeks Virgin Shores

By Peter Janhunen, Manager of Publications
Air Line Pilot, April 2004, p.34

Keeping one step ahead of Richard Branson is never easy. ALPA has joined a group of unions and the AFL-CIO’s Transportation Trades Department (TTD) in seeking to do just that. The group sent a letter to the congressional delegations of San Francisco, Boston, and northern Virginia in advance of the flamboyant British multimillionaire’s reported plans to launch a new carrier, Virgin USA, and to base it in one of those jurisdictions.

The letter is just the start of a larger effort to educate policymakers and the news media about the threat that Virgin USA would pose to U.S. airlines and their workers. TTD President Edward Wytkind signed the letter.

"Because many public officials are aggressively working to bring Virgin USA to [your city]," the letter read, "I wanted you to be aware that Richard Branson, founder and chairman of Virgin Group, has a clear agenda: to gut U.S. laws that limit foreign control and ownership of U.S. airlines and that bar foreign air carriers from serving domestic point-to-point markets in the United States.

"The message to Mr. Branson as he prepares to launch a new airline should be just as clear: America will not bend the rules for Virgin USA," the letter continued.

ALPA and the other 34 affiliated unions of the TTD have always opposed changes to foreign ownership and control limits that will harm the interests of U.S. aviation workers—including pilots. Current law restricts foreign interests from holding more than 25 percent of voting stock of a U.S. carrier, yet the Bush administration has proposed raising this cap to 49 percent.

The unions and the TTD have consistently opposed any policy changes that would allow foreign-owned carriers to engage in cabotage, or domestic point-to-point service, in the United States.

"Richard Branson’s plans are dangerous," says ALPA’s president, Capt. Duane Woerth, who also serves as TTD vice-president. "Opening U.S. domestic markets to foreign point-to-point competition or permitting the foreign takeover of U.S. air carriers could devastate an already ravaged U.S. aviation industry and its workforce and have significant national security implications."

Branson’s business plan and public pronouncements have claimed repeatedly that Virgin USA will be well-positioned to take advantage of a struggling U.S. aviation industry, particularly the large network carriers. The competitive pressure this will place on existing carriers is real: Virgin Blue, a low-cost carrier the Virgin Group established in Australia, captured more than 28 percent of Australia’s domestic market in just 3 years.

Clearly, the introduction into the U.S. market of a low-cost carrier owned and controlled by foreign interests stands to undermine a critical U.S. industry that has been a major engine of job creation.

"In fact, every aviation job in this country supports another 18 American jobs," the TTD letter added. "Should Mr. Branson proceed with his plans and seek Department of Transportation certification to operate a U.S. airline, we will insist that all existing laws and regulations regarding foreign involvement are fully applied and enforced. We will strongly oppose—and spotlight—any rule-bending or influence-wielding that harms airline workers.

"While we understand the desire of local officials to bring jobs to [your city], it cannot be ignored that the parent company of Virgin USA has pursued policies that are directly counter to the interests of America’s airlines, their workers, and the communities that rely on the major air carriers for service and jobs. In the pursuit of job creation, public officials must carefully consider the full and lasting impact of their actions," the letter concluded.

ALPA and the other members of the TTD will continue to educate public officials and others on this potentially devastating plan.