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January 7, 2011 BY ELECTRONIC MAIL Anne Suissa Director Office of Airline Information Bureau of Transportation Statistics Research and Innovative Technology Administration U.S. Department of Transportation 1200 New Jersey Ave., S.E. Washington, D.C. 20590 Dear Ms. Suissa: As discussed with you earlier today, Virgin America Inc. ("Virgin America") is requesting a waiver from the otherwise applicable System of Accounts and Reports for large certificated air carriers, 14 C.F.R. Part 241, as more fully described herein
. Virgin America respectfully su bmits that a grant of this waiver would be in the public interest. Under the Department's reporting requirements (Sections 21-25 of the System of Accounts and Reports), large certificated air carriers must regularly submit detailed onflight market and nonstop segment data as well as financial results to the Department, with separate data reported for each applicable operating entity (Domestic, Latin America, Atlantic and Pacific). Until last month, all of the markets served by Virgin America fell within the "Domestic" operating entity and, therefore, Virgin America's traffic and financial data have not been reported under separate operating entities.' On December 16, 2010, Virgin America launched limited service to Mexico, with 5 weekly roundtrips in the San Francisco ("SFO")-San Jose del Cabo ("SJD") city pair. Virgin America plans to introduce 5 weekly roundtrip flights in the Los Angeles ("LAX")-Cancun ("CUN") city pair and 3 weekly roundtrip flights in the SFO-CUN city pair beginning on January 19-20, 2011. These additional flights will, however, constitute only a very small fraction of Virgin America's total scheduled flying
. For example, Virgin America projects that it will operate Although Virgin America serves Toronto, Canada, under the Department's regulations "the domestic entity
... shall also include Canadian transborder operations." See Subsection 21(g).

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January 7, 2011 Page 2
no more than 12 roundtrip flights in the SFO-SJD market for the reportable December 2010 period, accounting for about 0.7% of its total capacity. Virgin America further anticipates that, with. the addition of CUN service, all of its Mexico flights will account for no more than 2% of its total scheduled capacity for the reportable January 2011 period. Furthermore, when measured on a quarterly basis, Virgin America projects that these flights will account for only 2.7% of the carrier's total scheduled capacity for the three month period ending on March 31, 2011. Virgin America would ordinarily be required to separately report data for these flights under the "Latin America" operating entity. However, and as set forth above, these flights will be the only Virgin America operations that do not fall within the Domestic operating entity. Asa consequence, the added cost to Virgin America of setting up an entire set of separate accounting records for a Latin American entity that is only a very small part of Virgin America's scheduled system clearly outweighs any benefits that will be provided to the overall Latin American system of records compiled by the Department. Indeed, the ASMs that will be flown by Virgin America in the first quarter of 2011 in Mexico constitutes only 0.3 percent of the ASMs reported by all other U.S. carriers in the first quarter of 2010 for their Latin American entities. Turning to the criteria that must guide the Department in its review of this waiver request under Section 1-2 of Part 241, Virgin America submits that these particular circumstances warrant a departure from the otherwise applicable reporting procedures. Operating and financial results for Mexico will constitute but a small portion of Virgin America's total reportable data and, in any event, users of the Department's Form 

### 41 data will be able' to easily retrieve Virgin America's Mexico traffic statistics by segment specific airports. As a consequence, the alternative method proposed by Virgin America (i.e., inclusion of the operating and financial results in the Domestic operating entity) win result "in 

### a substantially equivalent portrayal of operating results or financial condition,

. consistent with the principles embodied in the provisions of this system of accounts and reports." ld. Moreover, the alternative procedure which Virgin America proposes will effectively maintain the "uniformity in substantive results as between air carriers." Id. Furthermore, it is not in the public interest for Virgin America to expend Significant resources to set up an entirely separate set of accounting systems for such a limited amount of information. Finally, it is Virgin America's understanding that similar waivers have been granted to carriers in the past until their Latin American operations had grown to 

### the point that it 

### was in 

### the public interest to report 

### that information as a separate Latin American entity. For the foregoing. reasons, Virgin America respectfully urges the Department to grant its waiver to the extent necessary to allow the carrier to include operating and

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January 7, 2011 Page 3 financial results for these very limited Mexican operations within the Domestic operating entity. Please contact me at 650-762-7108 ifyou have any questions related to this request. Very truly yours,



# . ::~;{-' f · V' Jr1~~~ Varley Senior Vice President & eneral Counsel

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