Virgin America, the airline startup with a brand name made famous by British entrepreneur Richard Branson, said on Monday it named as its chairman Don Carty, the former chairman and chief executive of AMR.

Carty quit the American Airlines parent in 2003 amid union outrage over a package of bonuses and pension benefits negotiated for him and other executives just as the carrier's rank and file workers agreed to wage and salary cuts to avoid a bankruptcy filing.

He is now also serving as chairman of Toronto-based REGCO Holdings, which plans to launch an airline that will operate out of Toronto City Center Airport. In addition, he is a member of the board of directors at Hawaiian Airlines, which emerged from bankruptcy last year.

Virgin America's plans to fly between San Francisco and New York and other destinations have sparked opposition from a group of airlines led by Continental Airlines. They have questioned whether new carrier violates US laws barring foreign ownership of airlines.

Branson, who runs Britain-based Virgin Atlantic Airways and would have a 25 percent equity stake in the new airline, has long wanted to enter the US airline market as a domestic player.

Carty is well connected in Washington, where Virgin's application to start service is pending before the Transportation Department.

He will also become an investor in VAI Partners, an investment group funded by US investment firms Black Canyon Capital and Cyrus Capital Partners that will provide much of the financing for the Virgin America startup.