Virgin America on Monday said Don Carty, former American Airlines’ chief executive, had been appointed as non-executive chairman of the US start-up.
Mr Carty arrives amid frustration at Virgin America over delays to the regulatory approval process for the airline, which plans to launch transcontinental services from its San Francisco base this year.
Virgin America has been planned for more than three years and is the latest foray by Sir Richard Branson, the UK entrepreneur, to take advantage of his Virgin brand in the global airline sector. Virgin America joins his Virgin Atlantic business and start-ups in Belgium, Australia and Nigeria.
Mr Carty, a Canadian, has 20 years’ experience in the airline industry but was ousted from American in 2003 amid uproar from unions over an executive compensation plan.
He currently serves on the boards of Hawaiian Airlines, Dell and Sears. He will oversee a management team at Virgin America led by Fred Reid, a former senior executive at Lufthansa and Delta Air Lines.
Virgin America has secured $177.3m in funding, including $88.9m from Black Canyon Capital and Cyrus Capital Partners, two US private equity firms. Virgin companies will invest $29.8m in equity and provide $58.6m in debt financing to conform with US law limiting foreign investors in a US airline to 25 per cent of the voting rights.
However, the business plan and foreign ownership interests have been challenged by a number of airlines, and the US Department of Transportation has yet to rule on a request for additional information to confirm its adherence to investment laws.
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