Chief of Virgin Atlantic fuels profit hopes in joint venture The new chief executive of Virgin Atlantic Airways has expressed a "high" level of confidence that the UK airline can return to profit in 2014-15, and remain a significant player in global aviation. In an interview with the Financial Times, Craig Kreeger - the first American head of Sir Richard Branson's airline - says he is looking to put Virgin on a course for sustainable profits through its planned transatlantic joint venture with Delta Air Lines of the US, and the use of more fuel efficient aircraft. Virgin Atlantic Airways, founded by Sir Richard in 1984, has run up operating losses over the past two years, but Mr Kreeger believes he has a comprehensive turnround plan that is buttressed by the long-haul airline's high-profile brand and reputation for good customer service. "I think we can be profitable [in 2014-15]," he says, adding that his target to restore profitability at the airline also applies Virgin Atlantic Limited, the holding company for the carrier and Virgin Holidays, the tour operator. You need to have sustainable, good returns and I think we have a plan that if we continue to [do] the things we're doing, it should get us to a sustainable model. Virgin Atlantic Airways generates a majority of its revenue in the UK, and it has struggled with the fragile British economy, which has damped demand for air travel. The airline has also been heavily penalised by high fuel prices because many its long-range passenger jets - such as the Airbus A340 - have four engines. These aircraft consume more fuel than the new generation of widebody aircraft, led by Boeing's 787 Dreamliner, which have two engines. But arguably the biggest problem for Virgin was the start in 2011 of British Airways" joint venture with American Airlines, where the two airlines collaborate on selling and scheduling their flights between the UK and the US. This made BA a far more powerful competitor on Virgin's core transatlantic routes - particularly in the lucrative corporate market where business travellers appreciate the convenience of high frequency services between London and New York. Mr Kreeger, who grew up in Sacramento, California, knows all about the potency of BA's transatlantic partnership - before he joined Virgin in February, he spent 27 years at American Airlines, including running its international operations. Virgin has responded by unveiling plans for a partnership with Delta, which in June bought a 49 per cent stake in the UK airline. The two airlines intend to co-ordinate their UK-US services in much the same way as BA and American Airlines do, in a joint venture that should start with annual sales of $3bn. By tying itself to Delta, Mr Kreeger believes Virgin has a big opportunity to increase revenue. He says the joint venture should enable Virgin to fly more Americans, as well as provide its UK customers with more destinations in the US by tapping Delta's domestic route network. Mr Kreeger is optimistic the partnership will be approved by the US Department of Transportation this autumn, even though other regulators last week filed a lawsuit to try and stop the proposed merger between US Airways and AMR, American Airlines" parent, because of concerns that reduced domestic competition will increase fares. "[The joint venture between Delta and Virgin] is good for consumers," he says. It's going to provide a great competitive alternative to what's out there. The other big change to Virgin's business model was the airline's move into short-haul flying in April, when it started services between London's Heathrow airport and Manchester, Edinburgh and Aberdeen. The move was necessitated by BA's merger last year with BMI British Midland, because the latter airline's short-haul jets had previously been an important source of transfer passengers at Heathrow for Virgin's long-range aircraft. Mr Kreeger says Virgin's short-haul services are progressing satisfactorily, but have "room to grow." Meanwhile, the airline should be able to reduce one of its biggest operating costs - fuel - when it takes delivery of the first of 16 Dreamliners it has on order in September next year. The Dreamliner burns less fuel than current generation aircraft partly because it is lighter, and Mr Kreeger describes the aircraft as a "real game changer" - in spite of some initial setbacks including problems with its batteries. He says the Dreamliner will provide Virgin with some "modest growth opportunities," adding the airline is interested in doing more flying to the US and Asia, as well as entering the Latin American market.