ANA Beats Delta to Skymark Turnaround Mission

The Y18 billion ($145 million) plan will see current shareholder Integral Corporation hold a 50.1 per cent stake in the low-cost carrier, with UDS Airlines Investment – a joint venture between SMBC and Development Bank of Japan –holding a 33.4 per cent shareholding and ANA a 16.5 per cent stake.

A rehabilitation plan backed by ANA Holdings, the parent of All Nippon Airways, has been selected by the creditors of Japanese carrier Skymark Airlines to support the business’ recovery and emergence from bankruptcy protection. The selection of preferred partner after two rounds of voting was approved by the Tokyo District Court on August 5, 2015 but still needs to be ratified by Japan’s Civil Aviation Bureau and other stakeholders.

The Y18 billion ($145 million) plan will see current shareholder Integral Corporation hold a 50.1 per cent stake in the low-cost carrier, with UDS Airlines Investment – a joint venture between SMBC and Development Bank of Japan –holding a 33.4 per cent shareholding and ANA a 16.5 per cent stake.

Editor's Comment


An interesting aspect of this deal is the reported Airbus support for the ANA-back deal. Media reports had suggested the European manufacturer was set to back the Delta-sponsored Intrepid Aviation offer, but allegiances were switched ahead of the creditor vote. Does this mean ANA has come to some deal with Airbus? Perhaps the Japanese carrier has agreed to acquire the six A380s Skymark had on order (two are already manufactured and parked awaiting a customer), pleasing fellow major creditor, Rolls-Royce in the process, or will add to its recent A321 short-haul order. Time will tell!

Richard Maslen - Content Manager

This was selected ahead of a rival bid from lessor Intrepid Aviation, Skymark’s largest creditor, which was being being sponsored by US major Delta Air Lines to support its own development plans in the Japanese market.

According to local reports, more than 170 of the airline’s creditors voted in two rounds - the first where each vote was weighted to the amount each creditor is owed, while the second gave each creditor an equal vote. ANA, it said to have won a majority of votes in each round.

Skymark has fallen into a financial crisis following an ambitious international expansion programme, which had seen the carrier sign up for the Airbus A380 Super Jumbo. Although its first aircraft was prepared for delivery it never formally took ownership of the aircraft, or a number of A330s from Intrepid Aviation. When the carrier entered administration it left Airbus and lessor as its main creditors, the manufacturer being owed hundred of million dollars in aircraft cancellation costs.

Although the rehabilitation plan has not been made public it is likely to see the Skymark operation rationalised with fleet and network cuts a certainty. The airline will likely operate in the future as a subsidiary business sunit of ANA, reducing costs of operation by maximising operational, marketing, training and technological synergies with its parent and its existing partner airlines.

It will, however, provide ANA access to Skymark's 36 landing and take-off slots at Tokyo's Haneda Airport, helping it strengthen its domestic dominance at the increasing popular facility, providing additional feed to its growing international network. Looking at it another way, it has also stopped these slots from falling into the hands of a rival, which would have impacted ANA’s position at Haneda.

ANA has been on a growth offensive in 2015 and recently revealed plans to expand its activities across the Oceania region with the resumption of flights into Australia from December 2015 with the introduction of a new non-stop connection between Tokyo Haneda and Sydney. This will was the fourth new international route from the carrier this year following the introduction of direct services to Houston in June 12, and already announced new links to Kuala Lumpur (starting September 1) and Brussels (from October 25).

The airline has now revealed it will further expand its international network with a new link between Tokyo Haneda and Guangzhou during the winter 2015/2016 schedule. This is part of a significant increase in its flights into China following the successful outcome of intergovernmental talks between Japan and China in this May.

Subject to receiving approval from the relevant authorities, ANA will commence the new route from October 25, 2015, and at the same time will increase flights from Haneda to Beijing and Shanghai from one to two daily rotations. The new late afternoon departures will complement the current morning schedules from Tokyo that are currently offered on both routes.

Including Hong Kong, Guangzhou will be ANA’s fourth route into China from Haneda and will complement the ten routes into the country it currently operates from Narita International Airport. This expansion will not only further strengthen ANA’s network linking China and the Tokyo metropolitan region, but also help business and leisure passengers from China to connect to other destinations in Japan using its domestic network from Haneda, while allowing international travellers to still connect at Narita to routes across Asia and to North America.