Airline Weekly - March 20, 2006
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Airline Weekly - March 20, 2006

Ready for Takeoff: Virgin America Chairman Don Carty Talks with Airline Weekly

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Cover Story

Ready for Takeoff: Virgin America Chairman Don Carty Talks with Airline Weekly

New airlines have come and gone in the two and a half decades since deregulation, but some startups attract more attention than others. Virgin America, which hopes to start flying from its base in San Francisco (SFO) this year, features a worldwide brand name, a strongly-capitalized balance sheet and a team of experienced airline leaders. One of those leaders is new Chairman Donald J. Carty, the former CEO of American Airlines. Carty, who also serves as chairman of a new Canadian startup airline and briefly held the CEO title of Canadian Pacific Airlines before it merged with Air Canada, spoke to Airline Weekly about Virgin America and other industry issues.

Airline Weekly: What about Virgin America attracted you, and what convinced you to invest your own money in the venture?

Don Carty: I'm really excited about Virgin America's business plan. We have an awful lot of capital and a very good management team. The Virgin brand is just the icing on the cake. The airline industry in the United States is in need of profound restructuring and rebuilding of consumer confidence, and I am convinced that Virgin America will be a critical factor in its evolution.

AW: What are some of your tasks and goals as chairman of the new startup? Do you spend a lot of time speaking with government officials? Are you advising the management team or getting involved with any operational aspects of the business?

DC: As chairman, I'll work primarily with Fred (CEO Fred Reid) and the investors on broad issues that have impact on the success or future—in the case of the DOT—of the airline. I'm interested in the business model, our financial sustainability, our commercial strategy and, yes, our relationships... (301 of 1206 words)

Also Inside this Issue:

jetBlue had a major impact on the U.S. airline industry when it launched from New York six years ago. Will Virgin America, if it ever clears regulatory hurdles, have an equally profound effect?

U.S. travelers will welcome any new capacity given the steady climb in airfares seen since last spring. Though flying remains historically cheap, falling industry capacity and ongoing strength in demand is enabling airlines to raise published prices and offer fewer seats at discounted prices.

We’ll learn more about pricing and other developments involving America’s major airlines when they reveal this quarter’s earnings. That won’t be long now, with two weeks to go before the first quarter comes to a close.

Industry consolidation may be necessary but largely nonexistent in the U.S, but it is happening elsewhere, for better or for worse. In India, government regulators are reviewing the recent Jet-Sahara merger deal while proposing the fusing of state-owned Air India and Indian (which recently dropped “Airlines” from its name).

In Russia, Aeroflot is angling to feast on its foes, swallowing them whole while its government stands by under a closed and darkening sky.

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