SKYMARK-AIRLINES/BANKRUPTCY Japanese carrier Skymark files for bankruptcy, blames Airbus

Record ID: 565763

  • Title: SKYMARK-AIRLINES/BANKRUPTCY Japanese carrier Skymark files for bankruptcy, blames Airbus
  • Date: 29th January 2015
  • Summary: TOKYO, JAPAN (FILE - JANUARY 2010) (REUTERS) SKYMARK AIRCRAFT TAKING OFF FROM RUNWAY
  • Embargoed: 13th February 2015 12:00
  • Keywords:
  • Location: Japan
  • Country: Japan
  • Topics: General
  • Reuters ID: LVA7IVB0P9MROWMM69JCKJQEHZED
  • Story Text: Japan's leading independent budget airline, Skymark Airlines Inc, filed for protection from creditors Thursday (January 29), and blamed a weak yen and a dispute with Airbus Group for its financial straits.
    The low-cost carrier had liabilities of 71.09 billion yen ($603.6 million) as of its bankruptcy filing with the Tokyo District Court, it said in a statement via the Tokyo Stock Exchange after an emergency board meeting.
    Chief Executive Officer Shinichi Nishikubo resigned and was replaced by board member Masakazu Arimori, said the company, which will delist on March 1.
    "First of all I would like to say in regards to this bankruptcy filing that I would like to apologise first to our customers, our clients, and our shareholders. I would like to apologise from the bottom of my heart for all of the trouble this has caused," Arimori said while bowing.
    Skymark, struggling with rising operating costs and intensifying competition from Japan's two big carriers, ANA Holdings and Japan Airlines Co (JAL), had projected a record net loss of 13.6 billion yen ($116 million) for the business year ending in March.
    Last July, Airbus revoked the $2 billion contract for six A380 superjumbo jets and filed a law suit in December over a dispute with Skymark concerning unpaid deposits.
    "We had been paying for the lease on the aircraft in dollars and with the sudden weakening of the yen, the burden of those payments suddenly increased. As such, due to the increasing competitiveness of other companies, the weakening yen, and increasing fuel prices our earnings and performance suddenly declined." Arimori said.
    Skymark's bankruptcy could spark a tussle between ANA and JAL for control of the company and access to its valuable landing rights at Tokyo's crowded Haneda airport. The discount carrier holds 36 landing slots at Japan's main domestic hub.
    ANA and its affiliates and partners have about half of the 465 domestic slots at Haneda, with JAL controlling 184.5 of the daily landing rights.
    Established in 1998, Skymark was a rare example of a Japanese budget carrier surviving without any affiliation with ANA or JAL.
    The dominance of those two carriers at Haneda, which sits at the heart of an urban sprawl that is home to about one in four Japanese, has kept low cost carriers at bay as it allows them to introduce stinging price competition on the few routes new budget airlines ply.
    In a December bid to find a lifeline, Skymark said it would hold talks with both JAL and ANA on code-share flights and seek more funds from investors.
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