Revealed: Virgin's New American Pilot

Mark Kleinman, City Editor
Revealed: Virgin's New American Pilot

Virgin Atlantic will on Tuesday reveal that it is swooping on the arch-rival of its new US shareholder to land a new chief executive as the airline founded by Sir Richard Branson enters a crucial period in its history.

I can reveal that Craig Kreeger, a senior executive at American Airlines, which has a key transatlantic alliance with British Airways (BA), is poised to be named as Virgin Atlantic's new boss.

Mr Kreeger, senior vice-president - customer, will bring the curtain down on a 28-year career at American by joining Virgin Atlantic. He will replace Steve Ridgway, who is ejecting from the cockpit after 11 years at the controls.

The American Airlines executive's arrival is likely to be viewed in the aviation industry as a coup for Sir Richard, for whom Virgin Atlantic has always remained his flagship enterprise.

As American's head of customer service, Mr Kreeger is credited with overseeing improvements on one of the biggest US airlines by passenger numbers.

Mr Kreeger has significant experience of Heathrow airport, Virgin's biggest operational hub. He was based in London for several years from 2003, where he oversaw American's sales and ground operations activities in Europe and Asia. He was subsequently promoted to run all of American's international operations.

Virgin Atlantic is expected to announce Mr Kreeger's appointment in a statement to staff later on Tuesday morning, with an external announcement scheduled for later in the day, according to people familiar with the airline's plans.

His arrival from American, BA's transatlantic partner, will raise eyebrows in an industry where rivalries are particularly intense, although it is not unprecedented for Sir Richard to pluck someone from there: David Cush, the president and chief executive of Virgin America, is also a veteran of American Airlines.

The recruitment of a successor to Mr Ridgway comes just weeks after Delta Air Lines, the big US-based carrier, acquired a 49 per cent stake in Virgin Atlantic from Singapore Airlines for $360m (£220m).

The fate of Singapore Airlines' stake had cast a shadow over Virgin's future for several years, with the Asian carrier making little secret of its desire to offload the shareholding having written down its £600m investment to zero.

Virgin Atlantic remains a minnow when measured against BA, although some of Virgin's other airline ventures, including its domestic US carrier, have been commercially successful.

Flying around 6m passengers annually and owning 40 aircraft, Virgin Atlantic has slumped to annual losses in recent years, hit by sharp rises in fuel prices and intense competition at Heathrow.

Flights between the UK and the US make up the most valuable long-haul market by revenue, a segment Delta was keen to secure a more lucrative slice of.

Delta and Virgin Atlantic have agreed to set up a joint venture for transatlantic flights, which requires the approval of regulators. Mr Kreeger will have to assess whether it makes sense for the British airline to join SkyTeam, one of the three main global airline alliances.

The new boss's other key tasks will be to make a success of Virgin Atlantic's new short-haul service, which will involve launching flights between London and Scotland through a partnership with Aer Lingus.

Virgin Atlantic's bitter battle with BA became even more fractious in 2012. Willie Walsh, chief executive of International Airlines Group (IAG), BA's parent company, issued a public challenge to Sir Richard that the Virgin Atlantic brand would soon disappear.

Mr Kreeger's appointment to run Virgin Atlantic spells disappointing news for the main internal candidate for the job. Julie Southern, Virgin Atlantic's chief commercial officer, is well-regarded within the airline but is believed to have been informed some time ago that she was out of the running for the role.

Virgin Atlantic could not be reached for comment on Tuesday morning.