Flight Delayed at Virgin

Like most other airlines, Virgin America is eager to extol the virtues of its jets. A snack-packed minibar at the rear of the cabin. Personal TVs that let you order dinner and share MP3 playlists with other passengers. Mood lighting, tinted windows, music in the bathroom. And, of course, Virgin-branded edginess. "Instead of 'boarding process,' how about 'getting on the plane'?" asks CEO Fred Reid. "How revolutionary is that?"

The difference is that Virgin America isn't trying to sell you a ticket--there are none to sell--but to get you to write Congress and demand that the carrier be allowed to fly.

For more than a year, Virgin America's application at the Department of Transportation (DOT) has been enmeshed in a cantankerous debate about who, exactly, controls the airline. Richard Branson, the British entrepreneur who has plastered the Virgin logo on everything from record stores to cell phones, longed to start a U.S. branch of his renegade Virgin airlines but was kept out of the market by a law that says foreigners can't own more than 25% of a U.S.-based carrier. Nor can they run the show from behind the scenes.

So in early 2004, Reid, the former president of Delta, took over and soon two U.S. investors had ponied up $89 million in funding. Through a holding company, Branson kept a sizable stake--which old-line carriers like Continental and their labor unions have argued equates to foreign control.

The DOT agreed this past December and tentatively rejected Virgin America's application on the grounds that the use of the resources of the British umbrella-company Virgin Group--to develop a business plan, buy planes and solicit U.S. investors--didn't sufficiently recede when U.S. executives took over, and that there are still examples, including the licensing agreement to use the Virgin brand, of foreigners holding too much sway.

Virgin America is in a frenzied, last-ditch effort to get the DOT to change its mind, so the airline is turning to would-be customers for help. The company had planned to keep a tight lid on details about its planes until tickets went on sale. That strategy is history as the airline seeds websites like YouTube, Flickr and Digg with stories, pictures and video, hoping to gin up the sort of viral, user-generated movement that--we are told--now shapes our world. "We want to say to the consumers of America, this is what you're missing," says Reid.

Virgin America is also taking a page from the playbook Southwest developed during the years it spent trying to repeal the Wright Amendment. That bit of legislation was roundly criticized as anticompetitive for keeping Southwest bottled up at Dallas' Love Field--and as less of a threat to American Airlines' fortress hub at Dallas--Fort Worth International. Virgin America's planned rally website, letVAFly.com uses the same technology Southwest did to link consumers wanting to complain with legislators and officials--especially those in California, since Virgin America is based outside of San Francisco.