U.S. Investors Bail on Virgin America: Can They Stay “American?”

The Wall Street Journal reports:

The U.S.-based investors in Virgin America, the discount airline founded by Sir Richard Branson, recently cashed in their stakes in the startup carrier, according to people familiar with the situation — raising new questions about whether the airline can continue to comply with U.S. airline “citizenship” rules.

If the don’t replace this backing with other U.S. based investors soon, the airline may not comply with ownership rules. Under federal law, a U.S.-based air carrier must be at least 75% owned and controlled by American investors.

Given the cash the airline is hemorrhaging, this may prove to be difficult.