On August 5th, the creditors of bankrupt Skymark Airlines' [BC/SKY] (Skymark to file for bankruptcy.) approved a rehabilitation plan backed by ANA Holdings, parent of All Nippon Airways [NH/ANA], against the Delta Air Lines [DL/DAL]-sponsored proposal submitted by largest creditor Intrepid Aviation (Intrepid picks Delta to sponsor Skymark.). A plan was required to win approval of a majority of debt holders, both in terms of the proportion of liabilities and the number of creditors, and ANA/Skymark garnered 60.25% for the former and 135.5 out of 174 votes for the latter. Delta/Intrepid gained 38.13% and 37.5, respectively, while 25 creditors abstained. Japan is reverting to ANA/JAL duopoly, where they would control a whopping 97% of the domestic market together with its affiliates (ANA/JAL directly account for 79%).
With U.S.-based lessor Intrepid claiming 38% of Skymark's debt, the decisions of Airbus (Skymark's Airbus A380 order in jeopardy.), Rolls-Royce, and CIT Aerospace, accounting for 29%, 16%, and 14%, respectively (Skymark's total debts skyrocket to 300 billion JPY.), had been crucial. The Delta/Intrepid proposal was poised to win in terms of the proportion of liabilities as the three had opposed ANA involvement (Airbus and Intrepid to reject ANA/Skymark tie-up.). However, reportedly, in the final days before the vote, ANA etched in a deal with Airbus and Rolls-Royce to acquire some, if not all of Skymark's canceled A380s, powered by Rolls-Royce Trent 900 engines, and also promised CIT Aerospace that they would lease aircraft from them in the future, prompting the three to support ANA. For the number of creditors, it was ANA's to win from the first place, as most of the 197 creditors are smaller domestic companies having business ties with ANA.
Intrepid had initially welcomed ANA's involvement when Japan's largest carrier reportedly talked positively about inducting Skymark's canceled A330s (Skymark terminates all Airbus A330 leases.), however, outraged after the lessor learned ANA would not take them up, it decided to submit its own proposal (Skymark and Intrepid submit rivaling revival plans.). In June, the Tokyo District Court approved both plans for voting (Skymark/ANA and Intrepid both given go-ahead by court.). Intrepid's blueprint had originally lacked concreteness without an airline sponsor, but it selected Delta in July, and came out to boast a higher repayment rate at 5.5% for debts over 1 million JPY, made possible by Intrepid voluntarily withdrawing 30 billion JPY of debts Skymark owes them, provided the deal went through.
At the center of Skymark's bankruptcy was always their 36 coveted slot-pairs, or 8%, at regulated Tokyo/Haneda [HND/RJTT]. A bitter battle that started out with JAL luring Skymark for an extensive code-share (Skymark in talks with JAL for broad tie-up.) and rebuffed by ANA and the government (Skymark forced to seek ANA & JAL dual tie-up.) in the first round, former partners ANA and Malaysia-based pan-Asian LCC AirAsia [AK/AXM] (AirAsia admits Skymark bid defeat, Japan unit delay to 2016.) fighting in the second, and world's largest airline Delta going against ANA in the third has ended in Skymark falling into the hands of Japan's biggest airline, putting a period to Skymark's challenge against the ANA/JAL duopoly. Founded in 1996, they were Japan's first child of deregulation and also the last to remain independent (Skymark gives in to ANA; Japan reverts to duopoly.).
Skymark's new owners will together inject 18 billion JPY into the embattled carrier, 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 (DBJ) and Sumitomo Mitsui Banking, however, as both are loyal ANA partners, ANA would de facto control 49.9%. Six executives will sit on the board, and Integral will select three, ANA two, and UDS one; Integral's President Nobuo Sayama will take the Chairman's seat while DBJ's former Managing Director Masahiko Ichie will become President. The ANA/Skymark plan is expected to include extensive code-sharing, joint ticket sales, joint fuel purchases, joint crew training, and gradually aligning Skymark's network to complement that of ANA's, essentially stopping short of a takeover, replicating the cases with AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ]. A new corporate identity is also likely (Skymark hints at new brand: SKY bee?).
Now, all but one of Japan's mainline carriers would be associated with either ANA or Japan Airlines [JL/JAL]; Air Do, Skymark, Solaseed Air, and Star Flyer along with LCCs Peach Aviation [MM/APJ] and Vanilla Air [JW/VNL] are all in the ANA flock, while Fuji Dream Airlines [JH/FDA], Japan Transocean Air [NU/JTA], and Jetstar Japan [GK/JJP] have JAL influence. Independent of the two incumbents is fledgling Spring Airlines Japan [IJ/SJO] (Spring Airlines Japan plans Kansai, Sapporo, and China.), which will soon be joined by AirAsia Japan (Mk II) (AirAsia Japan confirms Spring 2016 launch from Nagoya.) in Spring 2016. For Haneda's slots, ANA/JAL would control 100%; JAL holds 40% (184.5) and ANA 37.4% (172.5), however, when the slots of de facto subsidiaries Air Do, Skymark, Solaseed Air, and Star Flyer are combined, ANA's figure jumps to a whopping 60%.
Source: Skymark Airlines, August 5th. (in Japanese)
Source: Reuters Japan, August 5th. (in Japanese)
Source: Nikkei Shimbun, August 5th. (in Japanese)
 |
| Dark days ahead for the flying public? Seen taxiing at Fukuoka, Boeing 737-8HX(WL) JA73NH left Skymark in January 2015 and now flies with Jeju Air as HL8034. ANA would like to trim Skymark's fleet from the current 27 to around 20, as part of a process to transform the former rival into a de facto subsidiary, as with Air Do, Solaseed Air, and Star Flyer. (Photo: Ryosuke Yano) |
With U.S.-based lessor Intrepid claiming 38% of Skymark's debt, the decisions of Airbus (Skymark's Airbus A380 order in jeopardy.), Rolls-Royce, and CIT Aerospace, accounting for 29%, 16%, and 14%, respectively (Skymark's total debts skyrocket to 300 billion JPY.), had been crucial. The Delta/Intrepid proposal was poised to win in terms of the proportion of liabilities as the three had opposed ANA involvement (Airbus and Intrepid to reject ANA/Skymark tie-up.). However, reportedly, in the final days before the vote, ANA etched in a deal with Airbus and Rolls-Royce to acquire some, if not all of Skymark's canceled A380s, powered by Rolls-Royce Trent 900 engines, and also promised CIT Aerospace that they would lease aircraft from them in the future, prompting the three to support ANA. For the number of creditors, it was ANA's to win from the first place, as most of the 197 creditors are smaller domestic companies having business ties with ANA.
Intrepid had initially welcomed ANA's involvement when Japan's largest carrier reportedly talked positively about inducting Skymark's canceled A330s (Skymark terminates all Airbus A330 leases.), however, outraged after the lessor learned ANA would not take them up, it decided to submit its own proposal (Skymark and Intrepid submit rivaling revival plans.). In June, the Tokyo District Court approved both plans for voting (Skymark/ANA and Intrepid both given go-ahead by court.). Intrepid's blueprint had originally lacked concreteness without an airline sponsor, but it selected Delta in July, and came out to boast a higher repayment rate at 5.5% for debts over 1 million JPY, made possible by Intrepid voluntarily withdrawing 30 billion JPY of debts Skymark owes them, provided the deal went through.
At the center of Skymark's bankruptcy was always their 36 coveted slot-pairs, or 8%, at regulated Tokyo/Haneda [HND/RJTT]. A bitter battle that started out with JAL luring Skymark for an extensive code-share (Skymark in talks with JAL for broad tie-up.) and rebuffed by ANA and the government (Skymark forced to seek ANA & JAL dual tie-up.) in the first round, former partners ANA and Malaysia-based pan-Asian LCC AirAsia [AK/AXM] (AirAsia admits Skymark bid defeat, Japan unit delay to 2016.) fighting in the second, and world's largest airline Delta going against ANA in the third has ended in Skymark falling into the hands of Japan's biggest airline, putting a period to Skymark's challenge against the ANA/JAL duopoly. Founded in 1996, they were Japan's first child of deregulation and also the last to remain independent (Skymark gives in to ANA; Japan reverts to duopoly.).
 |
| Airbus A380-841 F-WWSL/JA380A at Toulouse. Two of Skymark's six ordered (and canceled) have been completed and are stored. ANA's taking up of the A380s was necessary for them to win support from Airbus and Rolls-Royce, and keep true competition out of bread-and-butter Haneda for as long as possible by keeping Skymark under its control. ANA has deep pockets, but can they fly the A380 profitably? How long can protectionism prevail? (Photo: Airbus) |
Skymark's new owners will together inject 18 billion JPY into the embattled carrier, 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 (DBJ) and Sumitomo Mitsui Banking, however, as both are loyal ANA partners, ANA would de facto control 49.9%. Six executives will sit on the board, and Integral will select three, ANA two, and UDS one; Integral's President Nobuo Sayama will take the Chairman's seat while DBJ's former Managing Director Masahiko Ichie will become President. The ANA/Skymark plan is expected to include extensive code-sharing, joint ticket sales, joint fuel purchases, joint crew training, and gradually aligning Skymark's network to complement that of ANA's, essentially stopping short of a takeover, replicating the cases with AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ]. A new corporate identity is also likely (Skymark hints at new brand: SKY bee?).
Now, all but one of Japan's mainline carriers would be associated with either ANA or Japan Airlines [JL/JAL]; Air Do, Skymark, Solaseed Air, and Star Flyer along with LCCs Peach Aviation [MM/APJ] and Vanilla Air [JW/VNL] are all in the ANA flock, while Fuji Dream Airlines [JH/FDA], Japan Transocean Air [NU/JTA], and Jetstar Japan [GK/JJP] have JAL influence. Independent of the two incumbents is fledgling Spring Airlines Japan [IJ/SJO] (Spring Airlines Japan plans Kansai, Sapporo, and China.), which will soon be joined by AirAsia Japan (Mk II) (AirAsia Japan confirms Spring 2016 launch from Nagoya.) in Spring 2016. For Haneda's slots, ANA/JAL would control 100%; JAL holds 40% (184.5) and ANA 37.4% (172.5), however, when the slots of de facto subsidiaries Air Do, Skymark, Solaseed Air, and Star Flyer are combined, ANA's figure jumps to a whopping 60%.
Source: Skymark Airlines, August 5th. (in Japanese)
Source: Reuters Japan, August 5th. (in Japanese)
Source: Nikkei Shimbun, August 5th. (in Japanese)
No comments:
Post a Comment