JAPAN’S third-largest carrier, Skymark Airlines, has filed for court protection from its creditors with estimated liabilities of 71.1 billion yen (US$603 million).
Analysts believe, however, that the airline will receive the support of the nation’s two largest carriers, Japan Airlines (JAL) and All Nippon Airways (ANA), as well as the backing of the Japanese government to remain flying for the immediate future.
Part of that support will be in the form of codeshare arrangements with JAL and ANA on the 27 domestic routes that Skymark presently operates in Japan.
The agreements suggest that there will be no major disruptions for the travel industry and it is possible that Skymark will be able to successfully complete its restructuring efforts and rebuild its business.
“They are safe for the time being, but we will have to see what their customers do as there are some who may be wary of a company that is in bankruptcy protection,” Geoffrey Tudor, an analyst for Japan Aviation Management Research, told TTG Asia e-Daily.
“But we must remember that JAL was in the same situation a few years ago and is in very good shape again today,” he said. “Skymark could very well achieve the same outcome.”
A pioneer of LCCs in Japan when it commenced operations in September 1988, initially as part of a consortium headed by the HIS travel agency, Skymark incurred considerable losses in its early years.
A new management team, under CEO and majority shareholder Shinichi Nishikubo, saw the company into the black in 2003 and there were ambitious expansion plans for new longhaul routes, including to New York and London, with a US$2 billion fleet of six Airbus A380 aircraft.
The airline began to experience problems due to the soaring cost of aviation fuel and the falling value of the yen. Skymark is also in dispute with Airbus over the purchase of the new aircraft, with the France-based aircraft manufacturer filing a lawsuit in December over unpaid deposits.
