Don Carty, the low-keyed Canadian who rose to the top ranks of American Airlines parent AMR only to be forced out over a bonus scheme, has returned to prominence in the airline industry, becoming non-executive chairman of Virgin America, the Richard Branson-backed startup seeking to start low-fares, long-distance service from a San Francisco base.
Carty, 59, will also become an investor in the project with a stake in VAI Partners, which owns a 75% equity stake in Virgin America, the carrier said. The rest of the airline is owned by the Virgin Group, controlled by Branson.
Carty brings “vast experience” to Virgin America, said the startup’s chief executive, Fred Reid. Carty was chairman and chief executive of American’s parent AMR from 1998, when he succeeded legendary boss Bob Crandall, until April 2003. He resigned then amid labour objections to management perks after unions accepted $1.8 billion in concessions to help the company avoid bankruptcy. Except for two years in the mid-1980s at the helm of American’s affiliate, Canadian Pacific Airlines, Carty spent 24 years at American.
Since leaving, Carty has been approached by numerous startup proposals, turning most down. A member of the Hawaiian Airlines Holdings board, Carty has also been named chairman of proposed Canadian startup Porter Airlines, which hopes to begin domestic and transborder flights from close-in Toronto Centre City Airport.
His appointment – and his credibility with Washington lawmakers and regulators – should help Virgin America’s application to start up. But the application remains at the Transportation Department as the debate intensifies over foreign investment, a debate that Reid insists is entirely unrelated to Virgin America. Its $177 million in funding includes $89 million from two US private equity groups and $30 million (plus $58 million in debt financing) from Virgin Atlantic and related entities.
DAVID FIELD / WASHINGTON
Source: Airline Business
