UPDATE 2-Virgin Atlantic names American Air executive as CEO

Tue Jan 8, 2013 12:20pm EST

LONDON Jan 8 (Reuters) - Virgin Atlantic said American Airlines executive Craig Kreeger would become its next CEO as the British carrier looks to make a success of its transatlantic joint venture with U.S. partner Delta Air Lines .

Kreeger, a senior vice president at American's customer business, will assume the post on Feb. 1, succeeding Steve Ridgway, who will retire after 11 years as CEO.

Kreeger joined AMR Corp's American Airlines in 1985 as an analyst and spent six years in London heading its international operations. He also worked on American's joint ventures with IAG's British Airways and Iberia across the Atlantic, as well as its partnership with Japan Airlines Co Ltd in the Pacific.

One of Kreeger's main tasks will be to help kick-start Virgin's own partnership, announced last month, with U.S. carrier Delta.

Delta agreed to buy a 49 percent stake in the British airline from Singapore Airlines, creating a joint venture that would expand Delta's access to London's Heathrow Airport and increase competition in the lucrative transatlantic market.

"Craig is the right person to succeed Steve Ridgway at this dynamic and challenging time for our airline," Virgin Atlantic's founder and president, entrepreneur Richard Branson, said.

"We believe Craig has the experience and passion to drive Virgin Atlantic forward and capitalise on the opportunities created by our new venture with Delta Airlines."

Virgin's partnership with Delta will provide more competition to the alliance between British Airways and American, which has 60 percent of the important market between the United States and London.

Kreeger is "intimately familiar with how American looks at its alliances," said Robert Mann, a Port Washington, New York-based airline consultant. "So on that basis, it's a lot of strategic information that's available not only to Virgin Atlantic but potentially to Delta."

The Virgin partnership will help Delta make the most of its expansion in New York, where it is overhauling facilities at John F. Kennedy International Airport. Last summer it increased its flights out of LaGuardia Airport.

In a statement, American Chairman and CEO Tom Horton called Kreeger "a driving force at American" who helped make the airline more innovative. Jonathan Snook, American's vice president for operations, planning and performance, will succeed Kreeger as senior vice president of customer service, the U.S. carrier added.

In his new post, Kreeger's other key job will be to make a success of Virgin's new domestic short-haul service in partnership with Irish carrier Aer Lingus.

"An external appointment was going to be necessary if the airline were to take a different course," said Espirito Santo analyst Gerald Khoo. "Of course, the next question is what happens to the internal candidates who were passed over?"

Julie Southern, Virgin Atlantic's chief commercial officer, was seen by analysts as an early frontrunner for the CEO post.

Virgin, which flies some 6 million passengers annually, posted a loss in its most recent fiscal year as higher fuel costs and tough economic conditions took a toll.

The carrier reported a pretax operating loss of 80.2 million pounds in the year to the end of February, compared with a profit of 18.5 million pounds in the previous year.

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