The president of Hokkaido International Airlines, known as Air Do, apologized to shareholders at their annual meeting Friday for the carrier's effective failure.
"We are truly sorry, and offer a deep apology from the entire management," said Michimasu Ishiko, president of the airline.
The Sapporo-based regional airline, established only four years ago to offer discount flights between Sapporo and Tokyo, filed for court protection from creditors Tuesday after succumbing to fierce competition from the dominant carriers.
The newcomer will undergo rehabilitation under the wide-ranging sponsorship of All Nippon Airways.
Ishiko told about 200 shareholders at the meeting that Air Do is scheduled to submit a detailed plan for the court-supervised rehabilitation to authorities around September.
The plan will then have to be approved by creditors in October.
Shareholders asked the managers to explain how the carrier reached its decision to file for court protection and about its future financial outlook.
Air Do reported accumulated losses of 7.5 billion yen for the fiscal year that ended March 31, with liabilities exceeding assets by 300 million yen.
ANA has sought an alliance with Air Do in part to counter competition from Japan Airlines and Japan Air System, which will join forces in October.
Air Do's financial condition deteriorated sharply, particularly since late 2001, due to intensifying price competition and increased aviation insurance costs in the wake of the Sept. 11 terrorist attacks.
Air Do, capitalized at 7.19 billion yen, was launched in 1998 to serve the Sapporo-Tokyo route, going up against major domestic airlines by offering cut-rate airfares. It currently operates six round-trip flights a day between the two cities.