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Skymark’s rehabilitation on track a year after bankruptcy

JIJI

A year after its bankruptcy, Skymark Airlines, the nation’s third-largest carrier, is seeing an improvement in fortunes as rehabilitation gains pace.

It has withdrawn from unprofitable routes since it filed for bankruptcy protection with the Tokyo District Court on Jan. 28 last year, and it now flies only small aircraft.

In fiscal 2015 through March 31, Skymark’s seat occupancy rate is projected to hit its highest level since fiscal 2011.

The number of passengers rose 0.9 percent year on year to 479,000 in December, logging the first growth for the carrier in 14 months. In July-December last year, Skymark secured an operating profit.

The company is expected to finish paying back large creditors by the end of March, including a major U.S. aircraft leasing firm.

Meanwhile, Skymark faces a delay in preparations for a planned code-sharing arrangement with industry peer All Nippon Airways, a unit of ANA Holdings Inc. that is playing a role in Skymark’s restructuring. Skymark is unlikely to begin joint flights this autumn as originally planned.

The partnership was slated to begin this autumn, but Skymark is said to be reluctant to meet ANA’s request that it adopt ANA’s flight reservations system. Joint flights are seen as an important way to lure customers.

Some analysts believe it has gone cool on the idea of code-sharing. “Skymark is not making haste now to start the code-sharing flights as its profitability is improving on the back of the falling crude oil price,” an aviation industry official said.

Under its rehabilitation program, approved by the court last August under the nation’s civil rehabilitation law, Skymark is aiming to return to the Tokyo Stock Exchange within five years.

The company was delisted on March 1 last year following its bankruptcy.