Kreeger, a senior vice president at American's customer business, will assume the role on February 1 and replaces Steve Ridgway, who will retire after 11 years in the top job.

Kreeger joined AMR Corp's (AAMRQ.PK) American Airlines in 1985 as an analyst and spent six years in London heading its international operations. He also worked on American's joint ventures with IAG's (ICAG.L) British Airways and Iberia across the Atlantic, as well as its partnership with Japanese Airlines in the Pacific.

One of Kreeger's main tasks will be to help kick start Virgin's own partnership, announced last month, with U.S. carrier Delta.

Delta agreed to buy a 49 percent stake in the British airline founded by entrepreneur Richard Branson from Singapore Airlines (SIAL.SI), creating a joint venture that would expand Delta's access to London's Heathrow Airport and increase competition in the lucrative transatlantic market.

"Craig is the right person to succeed Steve Ridgway at this dynamic and challenging time for our airline," Branson, the airline's president, said.

"We believe Craig has the experience and passion to drive Virgin Atlantic forward and capitalise on the opportunities created by our new venture with Delta Airlines."

Virgin's partnership with Delta will provide more competition to the alliance between British Airways and American, which has 60 percent of the market between the U.S. and London.

Kreeger's other key job will be to make a success of Virgin's new domestic short-haul service in partnership with Irish carrier Aer Lingus AER.I.

"An external appointment was going to be necessary if the airline were to take a different course," said Espirito Santo analyst Gerald Khoo. "Of course, the next question is what happens to the internal candidates who were passed over?"

Julie Southern, Virgin Atlantic's chief commercial officer, was seen as an early front runner for the position by analysts.

Virgin Atlantic, which files some 6 million passengers annually, swung to a loss in its last full year as higher fuel costs and tough economic conditions took their toll.

The carrier posted a pretax operating loss of 80.2 million pounds in the year to the end of February compared to a profit of 18.5 million pounds in 2010/11.

(Reporting by Rhys Jones; editing by Paul Sandle)

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