• Kyodo


Struggling Skymark Airlines Inc. said Wednesday it is considering seeking assistance from All Nippon Airways Co. after facing criticism for its pursuit of a similar business alliance with Japan Airlines Co.

“It is true that we are considering calling for assistance from ANA” but nothing has formally been decided, Skymark said in a statement released after media reports on the move.

Skymark is already in talks with JAL for a partnership that would involve code-sharing on some domestic routes.

But the government has appeared reluctant to allow the deal out of concern that JAL’s involvement in Skymark’s reform plans could undermine fair competition in the domestic aviation market.

JAL made a remarkable turnaround from its 2010 bankruptcy, the country’s biggest by a nonfinancial company. The recovery was helped by a massive bailout from the government.

Skymark and ANA, which has also been critical of Skymark’s approach to JAL, are expected to meet as early as next week, sources close to the matter said.

Skymark President Shinichi Nishikubo told reporters that the company’s simultaneous approach to both JAL and ANA “may be unthinkable in terms of corporate logic” but that the embattled airline will “talk with ANA as well in order to balance the competition” in the sector.

The move can be seen as Skymark’s response to a possible demand from the transport ministry for securing fair competition.

Nishikubo said also that Skymark will try to raise funds in January or February by such means as allocating new shares to investment funds, with ownership limited to 25 percent or less.

Skymark said last month that it will seek to launch code-sharing flights with JAL, offering some of its domestic flights from Tokyo’s Haneda airport to JAL customers to reduce unfilled seats. The move would effectively increase JAL’s allocated number of domestic flights from Haneda, seen as cash-cow routes in the industry.

The launch of code-sharing flights from Haneda would require government approval.

Transport minister Akihiro Ota said last month that the ministry will “strictly” examine whether to give the nod to Skymark’s tie-up with JAL.

ANA is also keeping a close watch on JAL’s business strategy, saying that an airline formerly backed by public money should not pursue strategies that could undermine other carriers.

Forming a tie-up is crucial for Skymark, whose efforts at revamping could stall without help from such a partner when it is scrambling to rebuild its money-losing operations.

Skymark, which began operations in 1996, booked an unconsolidated net loss of ¥5.74 billion for the first half of fiscal 2014 ended in September, amid stiff competition from the two big airlines. It has also projected a full-year loss for the second straight year.

Skymark has also been in talks with Airbus over a penalty charge it has to pay to the European aircraft maker for cancellation of its order for six A380 superjumbos.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.