Virgin America CEO says trail ‘cold’ for Chicago service

By Dow Jones Newswires
Posted Aug. 10, 2010 at 6:13 a.m.

After failing for more than two years to secure airport gates in Chicago, Virgin America will begin flights to and from Dallas, its first mid-continent destination and a rare foray by a low-cost carrier into the “fortress hubs” dominated by network airlines.

Virgin America has also been trying to start services from Chicago O’Hare — a hub dominated by American and United–for more than two years, but David Cush, Virgin America’s chief executive, said he was less optimistic than ever that it could reach a deal with the city.

“It seems like that trail’s gone cold,” he said, though Virgin has two aircraft ready to start services from the second quarter of next year if a solution is found.

Cush cited an impasse between the City of Chicago and Delta Air Lines Inc. over the transfer of unused gates at O’Hare’s Concourse L.

Delta said it remained in talks with the city’s aviation department about the future of the facilities.

The privately owned U.S. airline plans to start two daily flights from Los Angeles and San Francisco in December to DFW, an airport where American Airlines accounts for almost three-quarters of flights.

“It’s kind of poking the tiger,” said Cush, a former staffer at AMR Corp., American’s parent.

Cush said American’s dominance was key in selecting the fourth-busiest U.S. airport as Virgin America’s 12th destination.

Los Angeles is the second-busiest route from DFW after Atlanta, and American offers 16 daily departures. The only other direct service is two regional jet services operated by the United Express arm of UAL Corp.. Cush said that lack of choice for passengers made DFW an attractive opportunity, and he hopes to add a third daily flight within six months.

Virgin America was launched by British entrepreneur Richard Branson, who on Tuesday announced the first formal links between the carrier and three other airlines he formed.

U.K.-based Virgin Atlantic Airways Ltd, Australia’s Virgin Blue Holdings Ltd and its V Australia arm and Virgin America will link their frequent-flyer programs.

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