On May 29th, Skymark Airlines [BC/SKY] filed a corporation rehabilitation plan with the Tokyo District Court that includes a sponsorship agreement with ANA Holdings, parent of All Nippon Airways [NH/ANA]. The new owners would together inject 18 billion JPY into the bankrupt carrier (Skymark to file for bankruptcy.), and a debt-equity swap would leave Integral Corporation holding 50.1%, UDS Airlines Investment 33.4%, and ANA Holdings 16.5%. UDS is a new investment firm jointly owned by Development Bank of Japan and Sumitomo Mitsui Banking. Six executives will sit on the board, and Integral will select three, ANA two, and UDS one; Integral will appoint the Chairman while UDS will choose the President.
The proposal includes allocating all 18 billion JPY to repay its debt, which Skymark targets to reduce to just 5% for creditors who claim over 1 million JPY. Creditors have so far filed claims totaling 308.9 billion JPY (Skymark's total debts skyrocket to 300 billion JPY.), including aircraft lessor Intrepid Aviation seeking 900 million USD (104 billion JPY) for scrapping seven Airbus A330 contracts (Skymark terminates all Airbus A330 leases.) and Airbus demanding 700 million USD (85 billion JPY) for the canceled A380 order (Skymark's Airbus A380 order in jeopardy.). The ANA/Skymark plan is expected to include code-sharing, joint ticket sales, joint fuel purchases, and joint crew training with ANA. A new corporate identity is also likely (Skymark hints at new brand: SKY bee?).
Meanwhile, biggest creditor Intrepid, which has decided to oppose ANA involvement in the rehabilitation proceedings (Airbus and Intrepid to reject ANA/Skymark tie-up.), also submitted a rivaling plan on May 29th. It says Integral would be the primary sponsor, but it would select an alternative airline partner other than ANA. "We are currently in the process of identifying candidates for a new airline sponsor," said the U.S.-based leasing firm, revealing Delta Air Lines [DL/DAL] as one of them (Skymark's fate: AirAsia, ANA, Delta, or...?). The debt repayment rate for those claiming over 1 million JPY is set at 3%, which is lower than the ANA/Skymark proposal. The European planemaker had also handed in a statement to the court on May 28th saying "If Skymark submits the plan (that involves ANA's sponsorship), there is a significant and realistic risk that it would not be able to gain the support of major creditors, including Airbus."
Intrepid had initially welcomed ANA's involvement as Japan's largest carrier reportedly talked positively about inducting Skymark's A330s, however, after they learned Japan's largest carrier would not take them up, it changed its mind. "It is true that we discussed the possible use of Skymark's A330 with Intrepid. And some media are reporting as if we are breaking a promise, but we didn't have any binding agreement. We ourselves are confused by what Intrepid is saying," said Toyoyuki Nagamine, Senior Executive Officer of ANA. Airbus is also unsatisfied with ANA not taking up the A380s. "We're not going to acquire a new aircraft just because we became Skymark's sponsor. We believe we enjoy a long friendly relationship with Airbus, and that would continue in the future. We will assist Skymark in negotiations with them," responded Mr. Nagamine.
Skymark criticized Intrepid's plan, saying feasibility of the rival proposal "is not clear at all" and offers a lower repayment rate for creditors' claims. The bankrupt carrier expressed confidence that if the court approves both plans, a majority of creditors would give consent for the ANA/Skymark rehabilitation plan at their meeting currently planned for July. A proposal is required to win approval of a majority of debt holders, both in terms of the proportion of liabilities and the number of creditors; thus rejection of the proposal by the two biggest creditors effectively blocks the ANA/Skymark tie-up. However, Skymark believes its actual debt they owe to Intrepid and Airbus are much lower, and hence do not need the support of the two (at least for now) biggest creditors.
ANA Holdings President Shinya Katanozaka said "We are the best sponsor." Although ANA and Intrepid have agreed to re-list Skymark within five years, the chief said "Our firm hold of Skymark shares will translate into their revitalization," adding "If there is a merit to both of us, we want to continue the partnership beyond their rehabilitation period." With so much priority on keeping genuine competition out of Tokyo/Haneda [HND/RJTT], ANA likely has no intention of letting go of its influence on the former rival start-up, which ultimately forced Japan's largest carrier to launch full-fledged LCCs Peach Aviation [MM/APJ] and the first AirAsia Japan (Mk I) [JW/WAJ] (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.), which now operates as Vanilla Air [JW/VNL].
Skymark plans to commence code-sharing with ANA as soon as it receives approval from regulator Japan Civil Aviation Bureau (JCAB), though routes have not been disclosed. Nobuo Sayama, President of Integral said, "We will suspend Sendai (Skymark to pull out of Sendai in October.) and Yonago (Skymark decides to close Yonago, keep Ibaraki.), but will fly elsewhere, where we can find more customers," adding "We will discuss new destinations with ANA as early as autumn." As with ANA's other minority-owned but de facto controlled carriers AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ], some of Skymark's Haneda slots are likely to be used to take over ANA's less profitable routes or launch new links on behalf of ANA, gradually transforming Skymark into a feeder carrier for Japan's biggest carrier.
ANA's Mr. Nagamine says Skymark would still be independent, as "Pricing would be decided by Skymark." Well, not many would agree with that.
Source: Aviation Wire, May 29th. (in Japanese)
Source: Aviation Wire, May 29th. (in Japanese)
Source: Reuters Japan, June 1st. (in Japanese)
Source: Nikkei Shimbun, June 2nd. (in Japanese)
Source: Yomiuri Shimbun, June 3rd. (in Japanese)
Source: Business Journal, June 3rd. (in Japanese)
Source: Nikkei Shimbun, June 5th. (in Japanese)
*Edited/updated on June 5th, 2015.
 |
| Boeing 737-86N(WL) JA73NK rotates from Haneda. If the ANA partnership is approved, Skymark will likely use some of its 36 slots to take over or launch less profitable routes for ANA, as is the case with Air Do, Solaseed Air, and Star Flyer. (Photo: Ryosuke Yano) |
The proposal includes allocating all 18 billion JPY to repay its debt, which Skymark targets to reduce to just 5% for creditors who claim over 1 million JPY. Creditors have so far filed claims totaling 308.9 billion JPY (Skymark's total debts skyrocket to 300 billion JPY.), including aircraft lessor Intrepid Aviation seeking 900 million USD (104 billion JPY) for scrapping seven Airbus A330 contracts (Skymark terminates all Airbus A330 leases.) and Airbus demanding 700 million USD (85 billion JPY) for the canceled A380 order (Skymark's Airbus A380 order in jeopardy.). The ANA/Skymark plan is expected to include code-sharing, joint ticket sales, joint fuel purchases, and joint crew training with ANA. A new corporate identity is also likely (Skymark hints at new brand: SKY bee?).
Meanwhile, biggest creditor Intrepid, which has decided to oppose ANA involvement in the rehabilitation proceedings (Airbus and Intrepid to reject ANA/Skymark tie-up.), also submitted a rivaling plan on May 29th. It says Integral would be the primary sponsor, but it would select an alternative airline partner other than ANA. "We are currently in the process of identifying candidates for a new airline sponsor," said the U.S.-based leasing firm, revealing Delta Air Lines [DL/DAL] as one of them (Skymark's fate: AirAsia, ANA, Delta, or...?). The debt repayment rate for those claiming over 1 million JPY is set at 3%, which is lower than the ANA/Skymark proposal. The European planemaker had also handed in a statement to the court on May 28th saying "If Skymark submits the plan (that involves ANA's sponsorship), there is a significant and realistic risk that it would not be able to gain the support of major creditors, including Airbus."
 |
| Airbus A320-211 N341NW at Salt Lake City. Intrepid Aviation is reportedly asking Delta Air Lines to sponsor Skymark. Airbus may also support the scheme, as the SkyTeam carrier is a major customer with 25 A350-900s, 25 A330-900neo aircraft, nine more A330-300s, and 45 A321s on order with potential for more. Delta has long wanted a partner in Japan, but has so far refrained from assisting Skymark. (Photo: Ryosuke Yano) |
Intrepid had initially welcomed ANA's involvement as Japan's largest carrier reportedly talked positively about inducting Skymark's A330s, however, after they learned Japan's largest carrier would not take them up, it changed its mind. "It is true that we discussed the possible use of Skymark's A330 with Intrepid. And some media are reporting as if we are breaking a promise, but we didn't have any binding agreement. We ourselves are confused by what Intrepid is saying," said Toyoyuki Nagamine, Senior Executive Officer of ANA. Airbus is also unsatisfied with ANA not taking up the A380s. "We're not going to acquire a new aircraft just because we became Skymark's sponsor. We believe we enjoy a long friendly relationship with Airbus, and that would continue in the future. We will assist Skymark in negotiations with them," responded Mr. Nagamine.
Skymark criticized Intrepid's plan, saying feasibility of the rival proposal "is not clear at all" and offers a lower repayment rate for creditors' claims. The bankrupt carrier expressed confidence that if the court approves both plans, a majority of creditors would give consent for the ANA/Skymark rehabilitation plan at their meeting currently planned for July. A proposal is required to win approval of a majority of debt holders, both in terms of the proportion of liabilities and the number of creditors; thus rejection of the proposal by the two biggest creditors effectively blocks the ANA/Skymark tie-up. However, Skymark believes its actual debt they owe to Intrepid and Airbus are much lower, and hence do not need the support of the two (at least for now) biggest creditors.
 |
| Airbus A320-211 JA8947 taxies past a JAL Boeing 737. Adding Skymark to ANA's portfolio of puppet carriers Air Do, Solaseed Air, and Star Flyer would have them control a dominant 60% of domestic slots at Haneda. The JAL Group controls the remaining 40%, effectively bringing back duopoly at Japan's most important airport. (Photo: Ryosuke Yano) |
ANA Holdings President Shinya Katanozaka said "We are the best sponsor." Although ANA and Intrepid have agreed to re-list Skymark within five years, the chief said "Our firm hold of Skymark shares will translate into their revitalization," adding "If there is a merit to both of us, we want to continue the partnership beyond their rehabilitation period." With so much priority on keeping genuine competition out of Tokyo/Haneda [HND/RJTT], ANA likely has no intention of letting go of its influence on the former rival start-up, which ultimately forced Japan's largest carrier to launch full-fledged LCCs Peach Aviation [MM/APJ] and the first AirAsia Japan (Mk I) [JW/WAJ] (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.), which now operates as Vanilla Air [JW/VNL].
Skymark plans to commence code-sharing with ANA as soon as it receives approval from regulator Japan Civil Aviation Bureau (JCAB), though routes have not been disclosed. Nobuo Sayama, President of Integral said, "We will suspend Sendai (Skymark to pull out of Sendai in October.) and Yonago (Skymark decides to close Yonago, keep Ibaraki.), but will fly elsewhere, where we can find more customers," adding "We will discuss new destinations with ANA as early as autumn." As with ANA's other minority-owned but de facto controlled carriers AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ], some of Skymark's Haneda slots are likely to be used to take over ANA's less profitable routes or launch new links on behalf of ANA, gradually transforming Skymark into a feeder carrier for Japan's biggest carrier.
ANA's Mr. Nagamine says Skymark would still be independent, as "Pricing would be decided by Skymark." Well, not many would agree with that.
Source: Aviation Wire, May 29th. (in Japanese)
Source: Aviation Wire, May 29th. (in Japanese)
Source: Reuters Japan, June 1st. (in Japanese)
Source: Nikkei Shimbun, June 2nd. (in Japanese)
Source: Yomiuri Shimbun, June 3rd. (in Japanese)
Source: Business Journal, June 3rd. (in Japanese)
Source: Nikkei Shimbun, June 5th. (in Japanese)
*Edited/updated on June 5th, 2015.
No comments:
Post a Comment