Virgin America sets its sights on O’Hare again

By Julie Johnsson
Posted Nov. 9, 2010 at 10:08 a.m.

Virgin America is once again looking to land at Chicago’s O’Hare International Airport in 2011, provided it can finalize an agreement with the city of Chicago to take over gates vacated by Delta Air Lines last year.

Virgin America CEO David Cush said Tuesday that talks were progressing and he was optimistic the carrier would begin daily flights from Chicago to Los Angeles and San Francisco next April.

“I think the city has certainly moved the process forward,” said Cush, saying he expected to hammer out an agreement in the next 30 to 45 days. “I’m more encouraged today than I was 60 days ago.”

Chicago has figured prominently in Virgin’s expansion plans since the low-cost carrier, affiliated with billionaire Sir Richard Branson, was launched in 2007. But the discounter hasn’t been able to settle on rental fees at O’Hare that it considered financially viable, and its plans have been flux.

Virgin America, Tuesday, reported its first quarterly profit, earning a net income of $7.5 million on revenues of $202 million, and is ramping up expansion even though larger carriers like United and American airlines remain in slow-growth mode. Virgin America plans to add three major cities to its network next year and to take delivery of 22 jets by the first quarter of 2012, nearly doubling its fleet of 28 aircraft.

O’Hare would provide convenient mid-continent connections for Virgin America, whose operations have been concentrated on both coasts. The San Francisco-based upstart, meanwhile, would provide the only direct competition to United and American airlines from O’Hare to California’s two business hubs.

Sources confirmed that Virgin, Delta and the city of Chicago were close to an agreement that would give the city control of the L Concourse at O’Hare’s Terminal 3. Much of the concourse has been unused since last year, when Delta shifted its operations to gates in Terminal 2 controlled by merger partner Northwest Airlines.

The city would transform the largely empty concourse into “common use” gates, available to Spirit Airlines, Virgin America and other newcomers.

Cush has requested two gates at O’Hare, and said he plans to enter Chicago flying five flights a day to Los Angeles and San Francisco. But he said Virgin America is also pushing the city to upgrade infrastructure on the concourse, repairing baggage belts and jet bridges.

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