Virgin America to Add Dallas as Chicago Plans Fail

Virgin America Inc. plans to begin flights to and from Dallas, its first mid-continent destination, after failing for more than two years to secure airport gates in Chicago.

The airline, partly owned by U.K. billionaire Richard Branson, said in a statement today that it will start twice- daily flights between Dallas and Los Angeles on Dec. 1, and add similar service to San Francisco on Dec. 6.

Following talks with the city of Chicago and carriers including Delta Air Lines Inc., AMR Corp.’s American Airlines and UAL Corp.’s United Airlines, Virgin America was unable to secure gates at O’Hare airport. Chicago has leased the gates to carriers already serving O’Hare on an exclusive basis through 2018.

“The trail has gone a little cold in Chicago,” Chief Executive Officer David Cush said in an interview. “We’ve tried to work with the city and the airport, and have made no progress in the last 12 months. We have a number of other airports that have been quite accommodating and are rolling out the welcome mat right now.”

Virgin America, based in Burlingame, California, negotiated an agreement to begin flights at Dallas-Fort Worth International Airport in “a few weeks,” he said. American Airlines and its American Eagle regional partner control 85 percent of departures from Dallas-Fort Worth, its largest hub.

No Talks

The airline will be the 11th domestic carrier to fly out of Dallas-Fort Worth. Seven airlines based outside the U.S. also serve the airport. Dallas-Fort Worth was the eighth-busiest airport in the world and fourth in the U.S. in terms of passengers last year, according to Airports Council International.

Virgin America has aircraft that would let it begin flights from Chicago in 2011’s second quarter, Cush said. There are no active talks to add the service, he said.

Dallas-Fort Worth has business ties to California, including the financial services, energy, computer and electronics industries, Cush said.

The closely held carrier plans to add about three cities a year to its system through 2016. Virgin America began flights to Toronto in June and plans to fly to Cancun and San Jose del Cabo, Mexico, by the end of this year.

Virgin America will add 22 aircraft to its fleet during the next 18 months and agreed in July to buy 40 Airbus SAS A320 jets that will be delivered from 2013 through 2016. Cush said he’s not concerned that the carrier is growing too fast.

“We do have a significant growth spurt coming up, but it’s a reasonable expansion,” he said.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

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