Can He Help Break Approval Gridlock?

Talk about a blast from the past... Virgin America announced Monday the airline has appointed Don Carty (right), former CEO of American Airlines' parent company AMR, as non-executive chairman for the US start-up airline.

"I'm really excited about the business plan that Virgin America has," Carty told Fortune Magazine Monday. "We have an awful lot of capital, a very good management team. And the Virgin brand is just the icing on the cake."

Carty comes onboard as Virgin America has hit something of a stalemate in its quest for federal regulatory approval -- stemmed, at least in part, by domestic airlines not thrilled with the prospect of competing with Virgin on American soil.

Airline executives hope Carty's experience with running an airline -- as well as his connections in Washington -- will help VA break through the gridlock, fueled by questions of where VA is getting its investment capitol.

"[Domestic airlines] have competed against Richard Branson before," said Carty, "so they are going to be concerned, but they don't want to be wrong, and it's obvious that US investors control VA."

Carty's tenure at American ended in 2003, when he was ousted amid controversy over his -- and other executives' -- large pay packages, as unions were being asked to cut their wages.

Carty told Fortune he doesn't hold any ill will towards American.

"I have the utmost respect for everyone at [American]," Carty told the magazine Monday. "It is the only legacy carrier not to disappear or go bankrupt."

Virgin America, which is partially backed by Virgin CEO Sir Richard Branson, has been trying for three years to begin service from San Francisco. Carty says the timeframe is in the hands of the DOT.

"Obviously we don't want to be presumptuous when it comes to the DOT," he told Fortune. "We hope soon."

FMI: www.virginamerica.com