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Last Updated: Thursday, 28 December 2006, 08:38 GMT
Regulators block Virgin America
Virgin Atlantic plane
Virgin America had planned to launch flights in 2007
The US government has blocked plans by Richard Branson's Virgin Group to launch a budget airline in America.

Officials refused to grant Virgin America an operating licence because the carrier was "not under the actual control of US citizens".

Under US law, airlines must be 75% owned and controlled by US citizens.

California-based Virgin America, part of British billionaire Mr Branson's Virgin Group, had planned to start domestic US flights in 2007.

Virgin Group has stakes in airlines in Europe, Australia and Nigeria.

Virgin America said it planned to respond to the US Department of Transportation's ruling by 10 January.

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