Virgin American drops O'Hare plans

Airline officials say Virgin America has canceled plans to begin service at Chicago's O'Hare International Airport in early 2009 after it failed to strike deals to lease gates at the airport from other airlines.

If the plan had gone through, San Francisco-based Virgin would have been the first new domestic carrier to enter O'Hare since JetBlue Airways began flying to Chicago in early 2007.

Virgin's decision is a blow to O'Hare and city of Chicago officials, who are struggling to recruit new airlines to offset a drop in the airport's operations. O'Hare capacity is reportedly down 23 percent for the fourth quarter from 2000 levels, with the deepest cuts falling over the past three months as carriers braced for an economic slowdown.