Virgin America asks to fly to Chicago

Hoping to start its first service to the Midwest, Virgin America Inc. will seek federal approval to fly to Chicago later this year.

The startup airline said Monday it wants to begin service to Chicago's O'Hare International Airport from San Francisco and Los Angeles. Chicago would be the eighth city that Virgin America serves.

If approved, Burlingame-based Virgin America would begin direct competition against United Airlines and American Airlines -- both of which fly direct to O'Hare from San Francisco International Airport and Los Angeles International Airport.

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Later this week Virgin America said it plans to file an application with the Federal Aviation Administration to serve O'Hare, which operates under a federal cap on the number of flights it can handle per day. Large airlines like United and American handle most flights at O'Hare. Virgin America, owned in part by British billionaire Richard Branson, said it hopes to seize market share by offering lower cost service.

Virgin America began operations in August 2007. It flies to Seattle, San Francisco, Los Angeles, San Diego, Las Vegas, New York and Washington, D.C. The company said this year it expects to hire 1,000 people, most of whom will work out of the Burlingame headquarters or as flight staff based at San Francisco International Airport. That would bring the company's head count to 2,000 employees by the end of 2008. Meanwhile the carrier could fly to as many as 12 cities by 2009, it said.

The airline will receive an additional $100 million from its U.S. and British investors soon. The new injection of capital will allow the low-cost carrier to continue hiring and expanding its routes to new cities. The additional money comes on top of about $300 million invested so far by U.S. private equity firms Black Canyon Capital LLC and Cyrus Capital Partners LP and Virgin Group Ltd., the London-based conglomerate run by Branson.