Virgin America expects profit by '09

CHICAGO -- Virgin America Inc., the low-fare carrier partly owned by UK billionaire Richard Branson that began flying yesterday, will be profitable within two years, said Robert Nisi, a member of the airline's board.

"We're probably looking, rough estimate, 18 months to two years" for a profit, Nisi said in an interview in New York. "We're committed to making this airline a success and we'll be behind it as long as we need to."

Nisi's Cyrus Capital Partners invested $80 million in Virgin America.

The airline began service between California and New York with 10 planes and will expand its fleet to 30 next year and 100 in five years, Nisi said.

Features such as seat-back consoles that let passengers communicate with each other will lure customers, he said.

The carrier has said it will add routes this year to Las Vegas and Washington. Nisi said Chicago and San Diego will be next, as Virgin America expands amid fresh competition from Southwest Airlines Co.

Southwest, the world's biggest discount carrier, is returning to San Francisco International Airport on Aug. 26 after a six-year absence, with 18 daily departures. Southwest said last month that it will match some Virgin America fares and offer lower prices for some tickets.

Southwest's chief executive, Gary Kelly, said Virgin America won't force any changes in his company's strategy.

"We're all going to have to fight hard to win customers," Kelly said. "There's not a limitless supply there."

Virgin America, based in Burlingame, Calif., got 25 percent of its $177 million in start-up funds, along with a $53 million loan, from Branson's Virgin Group Ltd., the parent of London-based Virgin Atlantic Airways.