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The holiday shopping season turned out to be two seasons: the Black Friday binge and a last-minute surge.

Together, they added up to decent sales gains for retailers. And the doldrums in between showed how shoppers have learned to wait for the discounts they know will come.

“The days that the American consumer gets excited about 25 percent off are over,” said C. Britt Beemer, chairman of America’s Research Group. “Shoppers are keeping their eye on the ball for the big sales events.”

In November, spending rose 4.1 percent. And from Dec. 1 to Dec. 24, it rose 4.7 percent compared with the same period last year, according to research firm ShopperTrak. A 4 percent increase is considered a healthy season.

The higher sales are good news for the economy, because they show shoppers were willing to fund a holiday splurge despite high unemployment and other lingering economic woes. Consumer spending, including major items such as health care, accounts for 70 percent of the economy.

Still, plenty of people are pinched for cash in the slow economic recovery, and they were seeking the best deals, which could squeeze stores’ profits for the fourth quarter, says Hana Ben-Shabat, a partner in the retail practice of A.T. Kearney, a management consulting firm.

Stores have trained even shoppers who are primed to spend to look for a discount.

Heading into the season, stores were nervous that shoppers would be tight-fisted. Many officially opened the season with discounts on TVs and toys that started as early as Thanksgiving Day. Consumers came out in droves, resulting in record spending.

Then the frenzy tapered off. A mild winter and the fact that Christmas fell on a Sunday encouraged people to wait until the last minute and accentuated the peaks and valleys of spending.

Stores started to push more discounts to get shoppers to spend in the finale. In fact, retailers’ promotional e-mails from Sunday, Dec. 18, to Thursday, Dec. 22, spiked 34 percent, compared with the same period a year ago, according to Responsys, which tracks e-mail activity from more than 100 merchants.

According to Beemer’s consumer surveys, 60 percent of shoppers polled were looking for discounts of more than 50 percent to get them to buy. That’s up from last year’s 51 percent of shoppers polled.

Tracey Spears of Locust Grove, Ga., who was shopping Wednesday at Atlanta’s Lenox Square Mall, said she got 75 percent of her holiday shopping done on Black Friday or the day after Thanksgiving. She took advantage of deals, including a Keurig coffee pot from Target and clothes from Hollister on sale.

“I had more money because I got a better bonus this year, but sales are important. You always want to buy stuff cheaper,” she said.

Spears and others helped to create pronounced waves in spending.

“The downs and ups were much more accentuated,” said Michael P. Niemira, chief economist at the International Council of Shopping Centers. “It just shows how cautious the consumer is. Consumers are bargain hunters more today than ever before.”

In the week before Christmas, last-minute shoppers gave retailers a 4.5 percent increase in revenue over the same week last year at stores open at least a year, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index. The index estimates sales at 24 major chain stores including Macy’s Inc. and Costco Wholesale Corp.

Revenue at stores open at least a year is an important measure of a retailer’s performance because it excludes stores that open or close during the year.

Total retail revenue for the week that ended Saturday reached $44 billion, 14.8 percent higher than a year earlier, ShopperTrak estimates.

For the week that ended Nov. 26, which included the traditional start of holiday shopping on the day after Thanksgiving, stores had the biggest sales surge from the week before since 1993, according to the ICSC-Goldman Sachs index.

The post-Black Friday lull was deeper than usual. The two weeks after Thanksgiving weekend showed the biggest percentage sales decline since 2000.

Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, Niemira said.

The season “was good but uneven,” he said.

Stores are expected to benefit when shoppers come back to spend gift cards, because people often spend more than the cards’ value. In addition, gift card sales are recorded only when shoppers redeem them.

People have more money on their cards to spend. According to an ICSC-Goldman Sachs survey of shoppers conducted Sunday, 18 percent of holiday spending went toward gift cards, up from 14.6 percent last year.

A total sales figure for the whole season won’t be available until after Dec. 31. And a fuller holiday spending picture will come Jan. 5, when stores including Target Corp. and Macy’s release December sales figures. Government retail sales data will be released in mid-January.

ICSC said it expects holiday sales for November and December to rise in line with its forecast of 3.5 percent. The National Retail Federation expects total retail sales for November and December combined to increase by 3.8 percent, up from its earlier forecast of 2.8 percent issued back in October. That’s still below the 5.2 percent holiday sales increase in 2010 from the previous year.

As proof that consumers are timing their spending to seek the best bargains, Black Friday was the biggest sales day, as expected, generating sales of $11.4 billion, up 6.6 percent from a year ago, according to ShopperTrak.

But the day after Christmas ranked fourth, behind Black Friday, Friday, Dec. 23, and Saturday, Dec. 17, according to final figures from ShopperTrak founder Bill Martin. Christmas Eve was strong too.

ShopperTrak measures foot traffic in 25,000 stores in the U.S. and blends those figures with economic data and proprietary sales figures from merchants. The data exclude sales from auto dealers, gas stations, restaurants and grocery stores.

“Shoppers are willing to spend when they know the biggest discounts are available,” Martin said.

Brooks Brothers, the upscale men’s and women’s clothier that doesn’t discount before Christmas, learned that this year. The Monday after Christmas, when the company offered discounts up to 40 percent, was a record spending day at its stores and its website.

“The first three weeks leading up to holiday were soft,” Lou Amendola, chief merchandising officer, wrote in an email. “But customers really partook in the after-Christmas sales.”

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Best Buy has alerted some customers that it will not be able to fill their online orders, just days before Christmas.

The largest U.S. specialty electronics retailer said late Wednesday that “overwhelming demand for some products from Bestbuy.com has led to a problem redeeming online orders made in November and December.

The Minneapolis company declined Thursday to specify how many orders are affected or which products are out of stock.

The shortages are a black eye for Best Buy, which has beefed up its online campaign to fight off intense competition from online retailers and discount stores. And the holiday season is crucial for retailers like Best Buy because it can make up to 40 percent of annual sales.

Some glitches should not be a surprise with such a massive surge in online shopping this year, analysts said, but there is a risk of a backlash.

“It is a hiccup for the company,” said Morningstar analyst R.J. Hottovy. “They were kind of behind the curve building out their online channel. They’ve done a good job investing in it, but if you make a lot of rapid changes, inevitably there are going to be growing pains.”

The canceled orders probably won’t make a big difference for Best Buy’s holiday sales this year, but it may lead to more customers looking elsewhere in the future, he said.

“The risk is any consumers affected by canceled orders will be willing to explore other alternatives for online shopping in years to come,” Hottovy said.

Online sales are up 15 percent to $32 billion so far this holiday season, while total sales are up just 2.5 percent.

Even though online sales are a huge boon for retailer, the shift has already created some problems. Discount retailer Target Corp’s site crashed in September because of overwhelming demand for Missoni for Target, a limited designer line of clothing, home goods and accessories.

Best Buy benefitted when its now-defunct rival Circuit City went out of business more than a year ago, but its suffering as Americans hold off on big ticket items and search for deals online and at discounters.

In order to compete, Best Buy has expanded its online offerings, cut back on square footage in the U.S. by closing stores and sought to expand internationally. In its most recent third quarter ending Nov. 26, Best Buy said its net income fell 29 percent as it cut prices in popular categories such as tablets and TVs to drive sales and traffic during the holiday season.

Best Buy shares rose 8 cents to $22.96 in midday trading.

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Egypt’s military sought to isolate pro-democracy activists protesting against their rule, depicting them as conspirators and vandals, as troops and protesters clashed for a third straight day, pelting each other with stones near parliament in the heart of the capital.

At least 10 protesters have been killed and 441 others wounded in the three days of violence, according to the Health Ministry. Activists say most of the 10 fatalities died of gunshot wounds.

The fighting, sparked when troops sought to break up a sit-in outside the Cabinet headquarters, has seen a particularly heavy hand by the military. Military police have been shown in video footage dragging women by the hair, even stripping the shirt off one veiled woman, and ferociously beating, kicking and stomping on protesters cowering on the ground.

Still, the protesters’ numbers have remained smaller than earlier rallies _ suggesting even anger over the disturbing images was not drawing the broader Egyptian public into a confrontation with the military, which activists behind the overthrow of Hosni Mubarak’s autocratic regime 10 months ago accuse of mismanaging the transition period and committing human rights abuses.

In a statement posted on its Facebook page, the ruling military council on Sunday called the clashes part of a “conspiracy” against Egypt. It said its forces had the right to defend the “property of the great people of Egypt.”

Seeking to depict the protesters as hooligans _ and apparently to counter the widely published images of protesters being beaten _ it also posted on the page footage of young men throwing rocks at a basement window of the parliament building and of at least one man trying to set the place ablaze.

The ruling generals have taken advantage of the growing frustration of many Egyptians over worsening economic hardships and tenuous security, blaming demonstrations, strikes and sit-ins for their predicament. The tactic, coupled with the military’s efforts to stain the reputation of the youth groups behind Mubarak’s ouster, appears to have worked.

The military has been using the state media and loyal private TV stations to project an image of itself as the protector of the nation and filling its public statements with patriotism and grave warnings of a dire future if political turmoil persisted.

Protest leaders increasingly complain that they feel isolated in a society that has grown more concerned with making ends meet than political rights. Many Egyptians see the ongoing, multistage parliamentary elections as a path to stability and an end to military rule.

“The military council uses every opportunity to show itself as the land’s strongest institution,” said Mohammed Abbas, an activist who defected from the Muslim Brotherhood, Egypt’s largest and best organized political group, to side with youth groups more active in protests. “We are making it easier for the generals by our divisions and isolation.”

In Sunday’s clash, protesters and troops battled on two main streets off of central Tahrir Square, trading volleys of stones and firebombs around barriers that the military set up to block the avenues.

One of the streets is site of a research center set up during the three-year occupation of Egypt by France in the late 18th century. The building was almost completely gutted by a fire which broke out during the height of the clashes on Saturday, when troops on its roof and on other nearby rooftops hurled rocks down on protesters below.

Protesters, who blame the fire on the troops, have been trying to salvage valuable books and documents from the center, whose two-story building is now in danger of collapsing after its roof caved in.

The deepening hostility between the ruling military council and the protest leaders is in sharp contrast to the days of the popular uprising against Mubarak in January and February when army troops ordered out on the streets to take over from the hated police were given a warm welcome by hundreds of thousands of protesters in Cairo and elsewhere. The military at the time said it wouldn’t fire on protesters.

When the military stepped into power after Mubarak’s Feb. 11 resignation, it was largely embraced by the public.

Sunday’s renewed violence was also taking place as unofficial results from a second round of voting in parliamentary elections showed Islamist parties, led by the Muslim Brotherhood, continuing their dominance at the polls. Liberal and left leaning parties, many of which sympathetic to the revolutionaries, have been trounced at the ballots.

The third and final round of voting is slated for next month in nine of Egypt’s 27 provinces.

The Islamists have been staying clear of the recent violence, fearing that they could jeopardize their electoral gains by taking part in the protests. Their stance has prompted many activists to accuse them of political opportunism.

The clashes began early Friday when one of several hundred peaceful protesters staging a sit-in outside the Cabinet offices near parliament was detained and beaten by troops. The protesters began their sit-in three weeks ago to demand that the nation’s ruling military immediately step down and hand over power to a civilian administration.

Activists have been trying to drum up public sympathy for their cause by flooding social network sites with photos and video from the troops’ brutal assaults he past two days.

“Liars,” proclaimed a red headline on the front page of the independent Al-Tahrir newspaper, referring to repeated denials by the military council and military-appointed Prime Minister Kamal el-Ganzouri that no force or live ammunition were used against the protesters. With the headline, the paper ran a photo of the woman protester who was half-stripped by attacking soldiers. Other widely circulating footage shows an army officer running toward protesters while firing a pistol at them, though it is not clear from the footage whether he was using live ammunition.

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The worst drought in Texas’ history has led to the largest-ever one-year decline in the leading cattle-state’s cow herd, raising the likelihood of increased beef prices as the number of animals decline and demand remains strong.

Since Jan. 1, the number of cows in Texas has dropped by about 600,000, a 12 percent decline from the roughly 5 million cows the state had at the beginning of the year, said David Anderson, who monitors beef markets for the Texas AgriLife Extension Service. That’s likely the largest drop in the number of cows any state has ever seen, though Texas had a larger percentage decline from 1934 to 1935, when ranchers were reeling from the Great Depression and Dust Bowl, Anderson said.

Anderson said many cows were moved “somewhere there’s grass,” but lots of others were slaughtered. He said that in Texas, Oklahoma, New Mexico, Louisiana and Arkansas, about 200,000 more cattle were slaughtered this year, a 20 percent increase over last year.

That extra supply could help meet increased demand from China and other countries, but the loss of cows likely will mean fewer cattle in future years.

“Consumers are going to pay more because we’re going to have less beef,” Anderson said. “Fewer cows, calves, less beef production and increasing exports.”

The U.S. Department of Agriculture estimates that beef prices will increase up to 5.5 in 2012, in part because the number of cattle has declined. That follows a 9 percent increase in beef prices in the past year.

Oklahoma, the nation’s second-largest cattle producer, also saw about a 12 percent drop in cows, Oklahoma State University agriculture economist Derrell Peel said.

Anderson said beef production nationally will be down 4 percent next year.

In Texas, the problem is primarily due to the worst single-year drought in the state’s history. From January through November the state got just 46 percent of its normal rainfall of about 26 inches.

The drought was the result of a La Nina weather pattern, which brings drier than normal conditions to the southwestern states paydayloans. Forecasters have said La Nina is back, meaning another dry year for Texas, Oklahoma and other nearby states.

The lack of rain coupled with blistering summer heat caused pastures to wither, leaving rancher with the choice of buying feed for the cattle or selling them.

Betsy Ross, a 75-year-old rancher from the small central Texas community of Granger, said she sold all but 80 of the 225 grass-fed animals she had in January. With feed costs up 40 percent and her pasture parched, Ross said she didn’t have any other option.

“It’s not a profitable year, heavens no,” she said. “If you can’t keep them on grass when they’re grass fed you’re not going to make any money.”

About 200 miles north in Sulphur Springs, Texas, part-time rancher Dwyatt Bell said producers in his part of the state sold off up to half their herds. Bell said high prices for cattle have helped offset increases expenses, but many ranchers still are struggling to stay afloat.

“It’s been a rough year,” he said.

Across Texas, the drought has caused an estimated $5.2 billion in losses to farmers and livestock producers, and that figure is expected to rise

Nationally, the number of cows has dropped by an estimated 617,000 this year, a 2 percent decline from the 30.9 million animals on Jan. 1. That number would be larger, but states in northern plains such as North Dakota, South Dakota and Nebraska, increased their cow herd.

Anderson said it’s unclear whether high beef prices would hurt U.S. sales or limit exports. The U.S. is the world third largest consumer of beef per capita at 85.5 pounds per year. Uruguay is first at 137 pounds per capita.

“Exports have been the strongest part of beef demand all year and they’re expected to remain so but higher prices should constrain their growth,” he said.

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Deep into overtime, negotiators from 194 nations worked straight through a second night, parsing drafts and seeking compromises to map out the future pathway to fight global warming.

Delegates, working on little sleep, huddled with allies to prepare for a decisive meeting later Saturday, when it will become clear whether the diverse and long-bickering parties can come together on a plan to extend and broaden the global campaign to limit greenhouse gas emissions.

“We think it’s important not to give up now. We have come a long way,” said a weary Connie Hedegaard, the European commissioner on climate issues, speaking more than 12 hours after the two-week conference had been scheduled to close Friday evening.

But she was concerned that the process was taking so long that ministers would leave before decisions could be adopted, costing hard-won momentum. “It would really really be a pity if we lose that now,” she told The Associated Press.

Small island countries and the world’s poorest nations lined up behind an EU plan to begin talks on a future agreement that would come into effect no later than 2020.

As negotiations progressed, the United States and India eased objections to compromise texts, but China remained a strong holdout, EU officials said on condition of anonymity due to the sensitivity of the continuing talks.

Under discussion was an extension of binding pledges by the EU and a few other industrial countries to cut carbon emissions under the Kyoto Protocol. Those commitments expire next year.

The EU, the primary bloc bound by commitments under the 1997 protocol, conditioned an extension on starting new talks on an accord to succeed Kyoto. The talks would conclude by 2015, allowing five years for it to be ratified by national legislatures. The plan insists the new agreement equally oblige all countries _ not just the few industrial powers _ to abide by emission targets.

Developing countries are adamant that the Kyoto commitments continue since it is the only agreement that compels any nation to reduce emissions. Industrial countries say the document is deeply flawed because it makes no demands on heavily polluting developing countries. It was for that reason that the U.S. never ratified it.

Host country South Africa organized the final stages of negotiations into “indabas,” a Zulu-language word meaning important meetings that carry the weight of a rich African culture.

At the indaba, the chief delegate from fewer than 30 countries, each with one aide, sat around an oblong table to thrash over text. Dozens of delegates were allowed to stand and observe from the periphery of the room but not to participate.

After the first meeting that ran overnight into Friday morning, conference president Maite Nkoana-Mashabane, who is South Africa’s foreign minister, drafted an eight-point compromise on the key question of the legal form of a post-2020 regime. The wording would imply how tightly countries would be held accountable for their emissions.

But the text was too soft for the Europeans and for the most vulnerable countries threatened by rising oceans, more frequent droughts and fiercer storms.

With passion rarely heard in a negotiating room, countries like Barbados pleaded for language instructing all parties to dig deeper into their carbon emissions and to speed up the process, arguing that the survival of their countries and millions of climate-stressed people were at risk.

Nkoana-Mashabane drafted new text after midnight Saturday that largely answered those criticisms. The U.S. told the indaba it could live with the language, but the reactions of China and India were not clear.

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The leaders of France and Germany called forcefully Monday for a new European Union treaty that would automatically punish countries that use the euro if they violate existing limits on overspending.

Stocks and the euro rose while European government bond yields dropped sharply as investors viewed the proposal for a closer fiscal union among the 17 countries as an important step to save the euro.

Implementing treaty changes could take months, but a commitment to tighter coordination could open the way for further emergency aid from the European Central Bank, the International Monetary Fund or some combination.

“Our wish is to go on a forced march toward re-establishing confidence in the eurozone,” French President Nicolas Sarkozy said at a press conference alongside German Chancellor Angela Merkel. “We don’t have time. We are conscious of the gravity of the situation and of the responsibility that rests on our shoulders.”

Investors have been hopeful that the pair will get what they want at a summit in Brussels on Friday, where failure could doom the euro.

There is a risk that implementing the proposals won’t move fast enough for markets or the most heavily indebted countries. Countries like Italy and Spain need help now to keep their bond yields _ the cost of their borrowing _ down.

Sarkozy said he and Merkel would prefer that the treaty be agreed by all 27 members of the European Union, but he left the door open to one that just covers the eurozone and anyone else “who wants to join us.”

Sarkozy and Merkel made several proposals, some of which could be enshrined in a new treaty. They included:

_ automatic punishment for any government that allows its deficit to exceed 3 percent of GDP. Governments are supposed to follow this rule already, but many, including France, have flouted it;

_ requiring countries to enshrine in law a promise to balance their budgets;

_ never again asking private investors to take losses, as a bailout of Greece did;

_ making Europe’s bailout fund permanent by the end of next year, rather than mid-2013;

_ and holding monthly European summits until the crisis is over.

Worries about the stability of the euro reached a high in recent weeks as Italy’s bond yield, indicative of the rate it would pay to borrow on markets, jumped to record peaks above 7 percent. That level is considered unsustainable and has eventually forced Greece, Ireland and Portugal to require financial aid. By comparison, bond yields in Germany, Europe’s largest and most stable economy, are roughly 2 percent.

But Europe can’t afford to rescue Italy, the eurozone’s third-largest economy, so the crisis went into high gear in recent weeks when it looked like the country might need a lifeline.

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They were lined up 300 deep before the store opened at 8 a.m.

Fans of Maple Leaf Gardens and Loblaws came to see how Canada’s most famous hockey arena looked now that it’s home to the supermarket chain’s newest urban grocery store.

They came from outside the city, from places like Malton, or from Toronto neighbourhoods, like Forest Hill and Riverdale. Ordinary citizens, hockey players and local politicians were among the first customers.

They weren’t disappointed.

The store, with its soaring ceilings, blonde wood, grey concrete and black tiles, forms a hip urban backdrop to a smorgasbord of fresh and prepared food the company hopes will cement its reputation as a leader in food retailing.

“The Loblaw store you’re about to shop, in our judgment, re-imagines a large urban supermarket at once recognizing the diversity of the neighbourhood that surrounds it and the national significance of the site,” Loblaw executive chairman Galen G. Weston said just prior to the opening.

The store pays homage to its past as Canada’s best known hockey arena, from the original lights, exposed brick and Maple Leaf-shaped wall sculpture in the atrium made from arena seats to the red dot on the floor in aisle 25 that marks centre ice.

But it’s also Loblaw’s biggest bet on its future since Weston took over from his father, W. Galen Weston, five years ago.

The store is the first full-service conventional grocery store the company has built in 12 years, Weston told reporters. It follows an ill-fated expansion into superstores that carried both food and general merchandise.

“I’m a Leaf fan. I’ve been a season ticket holder for over 30 years. I saw games here. This has great memories for me. I’m really happy they left a big historical site,” said Mike Seiden, who lives in Forest Hill but came down to see what the buzz was all about.

“I met Galen Weston. And his wife. I got a picture with him. He was signing autographs,” Seiden added. “He’s a great guy. I love him.”

Paula Firmino and Reg McLean, who live in Toronto’s Riverdale neighborhood, also stopped to congratulate Weston on the store and get their picture taken with him payday loan.

“After all the hype I wanted to see what it was really like. I love it. What they’ve done here is make it an experience to shop,” Firmino said.

“There was such a shortage of grocery stores downtown for many years. Now, with all the condos being built, it’s nice to have a place to walk to and shop, other than those tiny little places everywhere where everything is very expensive and you don’t get much of a selection,” McLean added.

Former city councilor Kyle Rae, who represented the area, said he was delighted with how the store had turned out. “The attention to detail is remarkable. For the community, it’s a real win, a great grocery store. For the rest of the city it’s going to be a destination to come and see what’s been done here.”

Former Toronto Maple Leafs hockey player Dickie Duff recalled how the Gardens was home to him for the 10 years he played with the Leafs in the 1950s and ‘60s.

“The Loblaw guys deserve a lot of credit. They’ve done a super nice job,” said Duff, who clinched the 1962 Stanley Cup for the Leafs when he scored the winning goal against the Chicago Blackhawks in Game 6.

Some of the store’s features, such as its in-house executive chef and kitchen, will be unique to the Gardens location, said Jane Marshall, executive vice-president of Loblaw Properties division.

The kitchen serves the “Canteen,” which serves “prêt-a-manger” style fresh ready made sandwiches and salads.

The store features a sushi bar run by its subsidiary T&T Supermarkets, an Asian food chain.

The store serves a potential market of about 100,000 people, who live in the area, and another 25 to 30 per cent who work in the surrounding office towers and retail outlets, Marshall said.

It’s also the only downtown grocery store with parking, she noted. One of the biggest challenges of the renovation was digging under the building to add 154 underground parking spaces, she said.

At 82,000 square feet, the store is considered large by inner city standards though Loblaw operates bigger stores in suburban markets.

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Virgin America CEO David Cush believes flying doesn’t have to be painful. He remembers when boarding a plane was exciting and wants to bring back that joy.

That is why every job applicant, including pilots, flight attendants and baggage handlers, takes a personality test. He wants employees who are hard-wired with positive outlooks on life.

Virgin America, which is partly owned by Richard Branson, the founder of the edgy British airline Virgin Atlantic, doesn’t aim to be the biggest carrier. It only flies between big cities, such as Los Angeles, Chicago and Boston, serving about 5 million passengers annually _ a tiny fraction of the size of major airlines like Delta and United.

But Cush wants Virgin America to be recognized for superior quality _ and he appears to be succeeding. The airline, based near San Francisco, has routinely ranked at the top of customer surveys.

The past month has been a little rocky, though. Since the airline switched to a new reservation system on Oct. 28, customers have not been able to change or cancel flights online or select seats on Virgin America’s website. Instead, they’ve had to call the airline or wait until they got to the airport. Cush emailed a letter to the 56,000 passengers affected apologizing for the problem and the airline says it hopes to have it fully resolved by the first week in December.

Virgin America’s fleet is made up of brand-new Airbus A319s and A320s, fuel-efficient aircraft that seat 119 and 146. Each is equipped with TVs for every passenger, colorful mood lighting and Wi-Fi. Instead of flight attendants dictating meal times, passengers buy food when they want it by pressing a few buttons on their TV.

“If you talk to people about what is most frustrating about air travel, what comes out is the loss of control,” Cush says. “We’ve been pushing to give people control again.”

Virgin isn’t the first U.S. airline to use TVs and friendly service to attract customers. Cush acknowledges some copying as he works to create the California version of New York-based JetBlue.

“JetBlue came around and had a different type of service. That opened my eyes,” he says.

But his quest to create a fun airline has been stymied by more serious concerns like high fuel prices and a recession whose impact is still being felt.

Since it started flying in August 2007, Virgin America has lost $661.4 million. Cush expects to become profitable in 2012, a year later than originally planned.

The privately held company is owned by a New York hedge fund, Richard Branson’s Virgin Group and private investors, including Donald J. Carty, the former head of American Airlines’ parent company, AMR Corp.

Cush, 51, spent most of his career at American and left to head up Virgin America just four months after the airline started flying.

The Shreveport, La.-native is a graduate of Southern Methodist University _ yet a giant Louisiana State University football fan.

In his spare time, Cush likes to swim and fish. In college, he was a DJ, spinning Bruce Springsteen and Pink Floyd tunes.

Cush visited The Associated Press in New York. Below are excerpts, edited for clarity, of the interview where he spoke about the health of American, his favorite seat and why risk-taking is necessary to survive.

Q: How is Virgin America different?

A: The biggest difference is our in-flight entertainment system. It’s a nine-inch screen _ larger than JetBlue. We’ve got live TV, on-demand movies, about 3,000 MP3s. We have food and drink on-demand. We’re the only airline in the world that has it. You order from the seatback, swipe your credit card. They see seat 12C wants a turkey sandwich and a Heineken and bring it to you on a tray. Carts aren’t blocking the aisles.

Q: Who came up with that?

A: This was designed before my time but as I tell people, as time goes on and memories fade it will become my idea.

Q: How much more are people willing to pay for these services?

A: The model is getting them to pay the same amount with a much lower production cost.

Q: How can you attract business travelers when your miles can’t be redeemed for Hawaii, Europe or other places you don’t serve?

A: The mile problem will be solved early next year. We have basic agreements with Virgin Atlantic and Virgin Australia that will be fully reciprocal. We also have agreements with Cathay Pacific, Singapore and Emirates that will develop into frequent flier relationships.

Q: In Dallas, you’re telling fliers to “dump your older airline for a younger, hotter one.” American responded by slashing fares to San Francisco and Los Angeles. Can you survive this fare war?

A: We’ll survive. At current fares, it will not be a profitable route but it wouldn’t be such a loss-making one where we would consider any type of reduction. You have to be in Dallas-Fort Worth if you’re going to be a business airline.

Q: In one ad you refer to American as running a cattle car. If you feel that way, how could you have worked there for 22 years?

A: It wasn’t always that way. The industry, out of survival, did a lot of things. One of the reasons I left was because I didn’t think the industry had to operate that way.

Q: Why did you get into the business?

A: I don’t think anyone knows why they get in unless they are a pilot or an aviation enthusiast. I wanted to live in Dallas. American was a big employer. Young, single, the ability to fly around anywhere you wanted to, it all sounded pretty good. Once you get in, you find it so intellectually demanding that you can’t see yourself doing anything else.

Q: Do you think that American is on the right path?

A: It’s hard to tell. There’s a culture there that is perhaps a bit risk-averse. In the past, it was always an airline that was willing to accept risk. The industry’s consolidated around it and all of a sudden American finds itself in third place. I don’t know if they have the answer. I do know their top guys. They’re smart, capable but at some point you need to stick your neck out a little bit if you’re going to get out of a rut.

Q: Are you a risk-taker?

A: Absolutely. But I don’t take unnecessary risk and I always have an exit strategy.

Q: Mile for mile, airplanes burn more fuel than cars, trucks or trains. Do you think this poses a problem for the industry?

A: If we don’t find a way to clean up air travel, we’ll become a pariah. We’ll be what the coal companies used to be.

Q: You’re in 14 markets. Where would you like to fly to next?

A: We’ve been trying to get into Newark, (N.J.) since the day we started. This is a huge policy issue _ slots and gates are tied up by legacy carriers. The economics of keeping us out of Newark are huge for United so they’ll fly unprofitable (regional jets) just to occupy slots. When we go into markets, fares drop by 30 or 40 percent.

Q: When you fly your own airline you always pick the second row of coach. Why?

A: I get to watch the interaction between our in-flight teammates and the customers in first. It’s a nice seat, 4A.

Q: A window.

A: I’m a window guy. Our in-flight entertainment system has Google Maps. You zoom in when you see something on the ground you’re interested in.

Q: How would you describe yourself as a boss?

A: I’m probably a tough guy to work for. I’m pretty demanding and part of the reason is the airline business is a demanding business. We have very little margin for error in building this into a successful company. We have 2,500 people that rely on us for a paycheck.

Q: Do you ever get overshadowed by Richard Branson?

A: All the time. People want to talk to him, they want to see him. When he’s around, I’m just the hired help.

Q: How much patience do you have for unprofitable routes?

A: We stopped service to two different places. One because we needed the aircraft, that was Orange County, (Calif.). We didn’t see that as a big strategic need. The other is Toronto. We misjudged the market.

Q: Did you fire the guy who pushed that route?

A: That was me, so no.

Q: In ten years, do you see Virgin America being a full-blown national airline?

A: That’s not our goal. The biggest discipline we need to have is not outgrowing the model. That means maybe 100, 150 aircraft, probably no more. The goal would be to be consistently profitable, the highest quality airline where we can hopefully make a few hours of people’s day a little bit nicer.

Q: Will you go public?

A: As much as it’s nice being private _ because you don’t have to manage to the short term and there are a lot of burdensome regulations that come from being public _ ultimately we need to (do an initial public offering.) It’s a capital-intensive business. We need to tap public markets and our investors want to take some money off the table. It could be 2013 if the market is ready.

Q: How do you unwind after leaving the office?

A: I do a lot of yoga. It’s a nice way to separate the mind from what you’ve gone through all day.

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