All Nippon Airways acquisition of Skymark and its A380s would be difficult but with upside for both


Talks between All Nippon Airways and Skymark Airlines could result in Japan's largest airline investing in Skymark, a 1998 start-up that carved a successful middle-market niche but now finds itself owing Airbus somewhere around USD1 billion for its Jul-2014 cancellation of a misguided order for six A380s.

Under the proposal, ANA would take Skymark's A380s and deploy them in the domestic Japanese market in a high-density configuration. Skymark would retain its own brand and operation, so the cooperation would extend beyond simple codesharing but stop short of a merger, which for various reasons is out of the question. ANA has similar but smaller partnerships with two other domestic carriers, Air Do and StarFlyer.

Airbus is understood to be backing the proposal as it wants to see its contract fulfilled, aware it could potentially put Skymark out of business over reparations for the A380. The manufacturer is understandably sensitive about criticisms of the A380 and keen to maintain the recently forged presence in the Japanese market. The Japanese government too would be likely to support a solution that keeps Skymark in Japanese hands.

The largest issue is that ANA and Skymark would need to agree on a price for a partial investment, made difficult as Skymark's stock plunged after the A380 cancellation. On this accounting ANA could gain a substantial position in Japan's profitable domestic market for the price of one or two widebody aircraft. Relations between ANA and Skymark remain cool, and Skymark's mercurial leader would want to try to retain as much independence as possible. ANA and Skymark would also have to decide if Skymark will target the low-cost or full-service market, but either way ANA could potentially learn about running a more efficient airline. Otherwise however synergies may prove limited; ANA could enhance its domestic market share, especially at Tokyo Haneda airport, but with few benefits beyond that.

  • Talks between All Nippon Airways (ANA) and Skymark Airlines could result in ANA investing in Skymark, which is currently in debt to Airbus for cancelling an order for six A380s.
  • ANA would take Skymark's A380s and deploy them in the domestic Japanese market in a high-density configuration.
  • Airbus is backing the proposal as it wants to see its contract fulfilled and maintain its presence in the Japanese market.
  • ANA and Skymark would need to agree on a price for a partial investment, which could give ANA a substantial position in Japan's domestic market.
  • ANA and Skymark would have to decide if Skymark will target the low-cost or full-service market.
  • The Japanese government is likely to support a solution that keeps Skymark in Japanese hands.

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Domestic acquisitions are not ANA's stated goal. A Skymark move would be opportunistic

ANA is cashed up and has a dedicated strategy aimed at (international) airline acquisitions. Nonetheless, discussions between ANA and Skymark are apparently focusing on price. ANA understandably favours a valuation closer to the current market level, which is significantly lower since Airbus terminated Skymark's A380 contract in Jul-2014. The cancellation caused Skymark's stock to plunge 30% as investors feared Skymark would have a large bill to pay - or would exit the market. Skymark equally understandably favours a higher valuation.

Skymark's market capitalisation as of 31-Aug-2014 is a low JPY18,450 million (USD177 million). Skymark's stock briefly increased in Aug-2014 on reports AirAsia was interested, which both parties quickly denied.

ANA could potentially acquire a significant stake for the price of one or two widebody aircraft. The domestic market and Tokyo Haneda slots are profitable, and with ANA's 77 widebody aircraft on order, it is easy to see the logic of having the equivalent of one or two aircraft alternatively buying an exposure to Haneda.

Shares Comparison for Skymark Airlines for the Last 12 Months

ANA is flush with funds, having raised JPY174.8 billion (USD1.8 billion) in Aug-2012, although this was less than its planned JPY211 billion (USD2.2 billion) capital raising. The timing may not have been coincidental as it occurred as JAL was re-listing after returning from bankruptcy.

ANA at the time indicated the proceeds would "be applied to capital expenditure, including the acquisition of aircraft, chiefly the fuel-efficient Boeing 787 aircraft (i.e. the 787-8 and 787-9 models), by the end of March 2015 for the main purpose of expanding the international route network." Yet ANA's first move was to increase its stake in domestic carrier StarFlyer, which went against ANA's international strategy.

However, ANA's additional stake in StarFlyer cost approximately only JPY2.47 billion (USD27.8 million) - less than the price of a narrowbody aircraft - and less than 2% of its additional capital.

ANA has more recently demonstrated its international ambitions, buying the Pan Am flight academy and proposing a stake in Myanmar's Asian Wings (since cancelled). But the Skymark investment may still rattle investors, unclear on ANA's ambitions.

The international business, through direct or indirect flying or ground-based activities, is seen as the future growth for Japanese carriers. But domestic Japan will have a long future, especially at Tokyo Haneda, where Skymark accounts for about 7% of slots (36 daily pairs).

Tokyo Haneda domestic movements by carrier: 1-Sep-2014 to 7-Sep-2014

See related reports: ANA's capital-raising and international acquisition strategy raise questions for investors

ANA also has significant aspirations, not only in maintaining a lead over JAL as the largest domestic carrier but becoming Japan's largest international airline as well.

Skymark has been profitable, but sustainability in a new environment will require refocus

Skymark would deliver ANA slots, but would the carrier come with a financial burden? Critics will point to Skymark's FY2013 loss of JPY2506 million (USD25.0 million), although the carrier has in recent times mostly been profitable, even if operating margins have been on the wane.

Skymark Airlines annual operating profit/loss (JPY million): FY2007-FY2013

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FY2013 was heavily impacted by a handful of routes from Tokyo Narita airport that were either too thin or competed with the new entrant, more efficient LCCs that have lower cost bases. The routes have since been dropped, but raise the question of Skymark's future. Skymark could not compete with LCCs or serve alongside them on an equal footing.

Skymark's main successes have been out of Tokyo Haneda, but expansion opportunities there are limited, potentially meaning that without a change in strategy, Skymark faces limited growth opportunities for the future. Skymark's future strategy, and the need for ANA to redefine it should the partnership go through, will be addressed in a later section.

See related reports:

ANA would probably look to deploy Skymark's A380s in the domestic Japanese market

ANA is attracted to Skymark by the latter's domestic position and third largest slot portfolio at constrained Tokyo Haneda airport. But it is simply Skymark's cancelled contract for six A380s that makes talk of an acquisition conceivable. It is only from the cancelled order that Skymark finds itself searching for a solution, and sees that ANA could help in exchange for a partnership.

ANA meanwhile would consider taking the A380s a small price to pay for a much larger strategic benefit, especially with the A380s probably at a fire-sale price. In their discussions, the two will have to balance Skymark's narrow objectives and ANA's broader aims.

The proposal is for ANA to operate the A380s in the domestic market. The configuration would be high density and the aircraft deployed mostly on trunk routes where there are typically flights at least once an hour.

ANA largest domestic routes ranked on frequency: 1-Sep-2014 to 7-Sep-2014

Up-gauging could help ANA consolidate flights and redeploy slots. This argument has long been pushed by Airbus, but ANA would likely use A380s in this manner only because Skymark had ordered them.

Nonetheless, Airbus could use ANA's short-haul A380 operation between hubs as an indication of the potential for similar operations elsewhere. ANA has been growing its domestic capacity - in FY2013 it flew nearly twice as many additional passengers as the next carrier - so there would be limited concerns of the A380 providing excess capacity in the domestic market.

Further, in 1Q2014 ANA has started to discount tickets to fill more seats; its domestic load at 60% shows much room for improvement.

Additional passengers carried year-over-year: FY2013

Trends of domestic passengers by segment and unit price: 1Q2012-1Q2014

See related reports:

The A380s would likely seat the highest number of passengers in an aircraft to date. ANA and Japan Airlines had operated high-density 747-400 "domestic" aircraft that sat over 500 passengers, almost the maximum certified capacity. ANA had however been unwilling to use very large aircraft in the domestic market, finding comfort with the 777-300 that seats 142 fewer passengers but with greater economics and has synergy with the rest of its fleet.

It has also ruled out very large aircraft operating internationally, so ANA is unlikely to deploy A380s internationally. ANA and JAL favour a strategy of using efficient twin-engined aircraft to focus on yield, not volume on their long haul routes.

The two also are opting for frequency to match the needs of local and connecting traffic; an A380 could mean sacrificing frequency for yield. Any cost disadvantage could be better contained in the domestic market than international.

Configuration of high-density aircraft

Aircraft ANA Domestic Configuration Maximum Certified Capacity
747-400 565 568
777-300 514 550
787-9 395 420
A380 - 853

Domestic A380 operations could be controversial operationally

Domestic A380 operations would raise a number of technical and regulatory matters that could be a headache - but they are not insurmountable. A380-capability standards would probably require some airport modifications. Tokyo Haneda, Japan's largest domestic airport and ANA's largest base, is the logical airport to use A380s. But Haneda does not permit A380 operations during the daytime as the A380's greater air traffic separation requirements restrict traffic flow.

ANA could conceivably overcome this restriction (and in any event Tokyo is looking to reasses airspace) but if ANA were permitted to operate A380s during peak daytime hours could prompt foreign airlines to lobby to use their A380s at Haneda during the daytime as well.

Air France ended A380 flights to Narita in favour of daytime Haneda flights, albeit with smaller aircraft, saying it would have preferred to use its A380 at Haneda; it would be hard to discriminate between foreign airlines once an exception had been made.

All Nippon Airways Fleet Summary: as at 31-Aug-2014

Aircraft In Service In Storage On Order*
Total: 197 11 128
Airbus A320-200 13 0 3
Airbus A320-200neo 0 0 7
Airbus A321-200neo 0 0 23
Boeing 737-500 0 1 0
Boeing 737-700 12 0 0
Boeing 737-700ER 2 0 0
Boeing 737-800 28 0 3
Boeing 767-300 20 10 0
Boeing 767-300ER 26 0 0
Boeing 767-300ER(BCF) 7 0 0
Boeing 767-300F 3 0 0
Boeing 777-200 16 0 0
Boeing 777-200ER 12 0 0
Boeing 777-300 7 0 0
Boeing 777-300ER 19 0 9
Boeing 777-9X 0 0 20
Boeing 787-8 31 0 5
Boeing 787-9 1 0 43
Mitsubishi MRJ90 0 0 15

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The Japanese government is likely to bless an ANA-Skymark partnership in these circumstances

Should ANA and Skymark agree to terms, the arrangement would likely have the blessing of Japan's government, for a a number of reasons.

(i) Nationalism - Tokyo is likely to prefer an outcome that keeps Skymark under as much Japanese ownership as possible, although like most countries, Japan does not permit majority foreign ownership of domestic airlines. Japan has welcomed a number of foreign-backed LCCs but these do not operate out of Haneda; they are seen as providing growth, mainly in the leisure sector. Japan under Prime Minister Shinzo Abe is taking a nationalist view across the country on an assortment of matters.

(ii) ANA is the favoured airline at present - JAL may have been the flag carrier and very symbol of "Japan Inc." for decades but its spectacular bankruptcy and government bail-out was contentious, and the new government has used the previous government's intervention in JAL as a point of differentiation. One indication: in a head to head contest, ANA in 2013 secured more Haneda slots than JAL. Symbolically too, the contract to provide maintenance for the Japanese government's future aircraft was switched from JAL to ANA. (Although it should be noted that these new government aircraft will be 777s, a type which ANA will fly well into next decade whereas JAL is shifting to 787s and A350s.)

(iii) A JAL bid would be difficult - ANA is Japan's largest airline, domestic and international, and partnering with Skymark could further skew the market. ANA in FY2013 (the year to 31-Mar-2014) flew 49% of the seats in the market while JAL and subsidiary JTA flew 32% and Skymark was third-largest with 8%. JAL is unlikely to acquire Skymark. It has a conservative domestic strategy that ultimately sees a reduction in size. A possible bid from JAL could meet resistance, as for example ANA could argue JAL would be using a financial position "unfairly" obtained through its government-supported restructuring.

(iv) ANA is still seeking redress - ANA has heavily lobbied against what it sees as JAL's unfair advantage obtained through government-back restructuring. ANA has said its greater allocation of Tokyo Haneda slots is fair as it helps address JAL's advantage. ANA could argue that being allowed to partner with Skymark would further level the playing field (as ANA sees it).

Japan domestic market share based on passengers flown: FY2013

ANA would gain some of Skymark's Haneda presence and possibly its better business practices. Skymark would secure its future - but might have other options

Provided ANA can make effective use of the A380s, it would achieve benefits from partnering with Skymark, although the exact amount of synergies may take some years to become evident. The Haneda slots would be very much the focus, as any further slot expansion is unlikely until the turn of the decade - and even then the slots made available would be fewer than the airlines will ask for. Skymark's slots would be for ANA's long-term benefit and not just a bridge to the end of the decade. So Skymark falls short of the once-in-a-lifetime growth opportunity for ANA that the bmi acquisition was for British Airways.

Another contrast, in this case more positive, is that where BA largely took bmi's slots and some routes and aircraft and disposed of the rest, ANA would gain insight into how Skymark has a lower cost base and perhaps extrapolate practices to its own business.

There is a precedent here: JAL learned from American Airlines how to more nimbly manage weak demand close to departure while ANA has taken some lessons from its LCCs. Then again, ANA's fundamental disagreements with AirAsia over how to be lean saw their AirAsia Japan (Mk I) joint-venture dissolved.

Skymark for its part would secure its future - not necessarily an exciting one, but a more stable and near-guaranteed one.

Yet Skymark could consider other options to remain independent and, with strategic changes, have a bolder future than the secondary role ANA would likely pursue for Skymark under a partnership. Alternatively, unsuccessful attempts at independence could see Skymark lose relevance or ultimately be forced to exit the market.

Skymark was always a contrarian airline, regarded as a volatile competitor in a sedate and high cost/high yield Japanese domestic market. The AirAsias, JetBlues and Vuelings of the alternative aviation world were often better than incumbents at ingratiating themselves with stakeholders: regulators, financial community and media. But not so for Skymark, whose outspoken founder, investor and president Shinichi Nishikubo was overly-confident of his strategy. He disdained the entrenched Japanese aviation community and proceeded to develop a very successful lower cost operation, largely against the odds. For both reasons Skymark was left with few friends in Japan and a world outside that largely does not know about the airline, aside from its failed A380 strategy - a sour distinction.

In these circumstances, Mr Nishikubo would probably prefer almost any option to a Japanese airline assuming de facto control. He is fortunate in that foreign capital has been always interested in Japanese aviation. A likely concern from ANA is not so much that JAL or another Japanese company would invest in Skymark, but rather that a more savvy international partner would put Skymark to far greater use than any Japanese carrier would. But this potential attraction is weakened by Skymark's self-inflicted low profile.

In terms of what is for sale, asset opportunities are limited as Skymark's fleet is all leased, according to CAPA's Fleet Database. An outside purchaser would need to have a very well framed synergistic opportunity if it were to invest, effectively, in the Japanese domestic market.

ANA and Skymark negotiations will not be easy. The Skymark brand is likely to be retained

ANA and Skymark have little in common, something that is likely to be more of a hindrance than of any suggestion of unlike poles attracting. ANA has regarded Skymark as a market aberrationn and the A380 plan to be a folly (proven right), while Skymark's Mr Nishikubo saw ANA as the embodiment of legacy Japanese aviation - which he specifically shaped Skymark not to be. Bold personalities and initiatives can bring success, as Skymark until recently has shown, but there are also drawbacks.

So ANA and Mr Nishikubo find themselves approaching the altar, not out of love for each other but what they respectively possess: ANA's cash, Skymark's Haneda slots.

Even if Skymark is little known outside Japan, Mr Nishikubo has every right to be proud of what Skymark has achieved: as a start-up in a duopolistic market, it has challenged ANA and JAL and, until recently, been successful. Skymark is a financial project and investment but also a personal one. Mr Nishikubo's instinctive style would prefer a passive investment from ANA, but the synergies for ANA are obviously tied to an active relationship. There are no public signs that Mr Nishikubo has any intention of standing down; the A380 miscalculation is a blight he would like to put behind him and keep growing Skymark; he would not like to see it plateau or shrink under ANA's hand.

ANA is not considering a full-takeover of Skymark, but even then integration will be limited. Mr Nishikubo would surely insist on the Skymark brand being retained and in one way at least this would be necessary. In Japan the regulatory view of slots is that they are seen as a public asset dispensed to specific airlines, unlike other airports such as London Heathrow, where slots are the property of the airline. A merger could provoke a reassessment of the slots allocated to Skymark, although this is an undefined area and unlikely to be an avenue ANA wants to explore as competitors will naturally look to make gains.

ANA would need to decide what type of airline Skymark is

Skymark has been overlapping a few business strategies and has been looking to narrow its focus. ANA would need to continue this examination. Skymark's 737s that comprise the core of its fleet seat 177 in an all-economy class. Skymark put on hold plans to introduce premium seating. Skymark was taking on too many projects, with too many costs, but the concept of premium seats on more leisure-oriented routes may not have been sound in the first place.

Although this makes Skymark sound like an LCC, ANA and JAL operate very dense configuration aircraft domestically with only basic complimentary beverages. ANA and JAL's domestic premium cabins are small. So overall the domestic market is on a bare-bones platform, but with the LCCs on a distinctly lower tier of service as they charge for luggage (and more), are less flexible and have lower on-time performance rates than the very high (above global average) rates achieved at ANA and JAL. Skymark is more of a basic ANA or JAL than a frilly Jetstar or Peach.

Skymark's A330s on trunk routes (to date only on Tokyo Haneda-Fukuoka) feature an all-premium economy seat that is closer to a recliner-style business class seat. Both the 737s and A330s are operated exclusively in the domestic market.

By stark contrast, the A380s, now cancelled, would have been in an all-premium configuration for a long-haul international operation - a remarkably adventurous first international foray. Even before the A380 cancellation, Skymark was considering opportunities to use A330s on regional medium/long-haul routes. Since the A380 cancellation Skymark has advanced this talk.

Skymark Airlines Fleet Summary: as at 31-Aug-2014

Aircraft In Service In Storage On Order*
Total: 32 1 7
Airbus A330-200 0 0 3
Airbus A330-300E 3 0 4
Boeing 737-800 29 1 0

The product is mixed, and the route network was as well but is being re-structured. Skymark's core network is services to/from Tokyo Haneda that target business passengers and leisure passengers willing to pay a premium over alternatives at more distant Tokyo Narita whose LCCs are still bedding down their reputation. Skymark had launched a smaller Tokyo Narita network but is pulling it down due to massive losses: in effect, Skymark does not have the cost base to stimulate new traffic and compete with LCCs.

That conclusion came quite late, but prior Skymark saw it needed to move up market if it were to attract higher yield in this new environment. It planned to launch a loyalty programme but has put this on hold as the A330 and A380 planning occupied resources. ANA would likely try to continue Skymark's up-market strategy.

ANA already has two LCCs in its portfolio (a minority interest in Peach and complete ownership of Vanilla Air), but certainly could not have three. Further, Skymark has a lower CASK than ANA but a higher one than LCCs: Skymark had a CASK of USD8.4 cents in FY2013 and is projecting USD9.0 in FY2014 while even Vanilla Air is targeting a CASK of USD6.7 and Peach is likely pursuing a more aggressive, but undisclosed, cost figure.

ANA Holding Group brand matrix: 2014

Full-Service/Hybrid Low-Cost

Moving up market could be easier than taking costs out of the business, unless ANA were to consider the radical approach of having a Haneda-based LCC that could try to leverage its Haneda geography and command a yield premium over Narita-based LCCs. As Asia's most expensive major airline, ANA lacks cost-cutting credentials.

Skymark's A330 introduction is still recent but with positive signs and a view from management they can raise prices. There is likely still value to be created from Skymark's up-market position. Further value could be created from a loyalty programme, within Skymark or piggybacking on ANA's. A possible partnership with ANA could make Skymark more attractive as it enlarged its virtual network, and/or ANA could drive more high-yielding passengers to Skymark.

And then there is the question of where ANA would deploy Skymark

If it were a partner, ANA would need to decide how to deploy Skymark: for example, in isolation, perhaps taking on ANA's lower-yielding premium routes; or alongside ANA, potentially creating a complex three-brand strategy (ANA, Skymark, Vanilla Air/Peach).

Fleet may drive deployment: although ANA is many times larger than Skymark, ANA's narrowbody jet aircraft at ANA mainline and ANA Wings number only 69 (some are used internationally) while Skymark's 29 narrowbody aircraft are all in the domestic market.

Fleet size of ANA partners (actual/potential): 31-Aug-2014

Carrier Fleet Size
Air Do 13
Skymark 32
StarFlyer 10

ANA has confronted this partnership juncture before, but on a much more limited basis. ANA and Air Do both operate to Hokkaido on the Tokyo Haneda-Sapporo route while Air Do exclusively operates smaller Hokkaido routes like Tokyo Haneda-Asahikawa. From Oct-2014, ANA will withdraw two of its five daily Tokyo Haneda-Yamaguchi Ube services, all operated by 767s, and StarFlyer will launch three daily flights on the route with an ANA codeshare.

Adding Skymark to the equation makes the matter far more complex:

- First, Skymark is much larger - in size (about three times Air Do or StarFlyer by the end of the year) - and in profile, which means Skymark cannot be relegated to a similarly minor role.

- Second, the product - mainly the A330s - is distinctly different from ANA, whereas Air Do is similar to ANA and StarFlyer has an improved product over ANA, but nowhere near Skymark's leap over ANA.

- Third, StarFlyer and Air Do have unit costs similar to ANA's. In fact, StarFlyer has an even higher CASK than ANA. But Skymark has a substantially lower cost base than ANA. ANA could have a potential competitive advantage by deploying Skymark, which generates far greater strategic opportunities than when ANA works with Air Do or StarFlyer. Those carriers are smaller and a smaller impact if deployed where they want to be, and not where ANA thinks makes sense from a group perspective.

Another option for ANA would be in regional international markets which are undergoing significant competitive changes. ANA may be more sensitive to its brand being used overseas when more basic products and services are offered, but a Skymark-branded operation could offer lower cost flights that ANA needs to feed its key long-haul network. Alternatively the leisure space could present synergies: Hawaii was mooted for Skymark's A330s, and ANA's LCC Vanilla Air has raised the prospect of possibly serving Hawaii later in time.

Japan's quirky regulations also raise some barriers

Regulators introduce another factor as the MLIT restricts domestic codeshare sales to 50% of seats on secondary routes and 25% for trunk routes (although there has been discussion about lifting the 25% figure to 50%). That allows a bigger airline to help a smaller one without the smaller one becoming a virtual operation. The difference in proportions is meant to help regional routes that need the sales network of a large airline.

StarFlyer's Tokyo Haneda-Kitakyushu route is considered a trunk route, and about 20% of the route's passengers are on ANA-coded tickets. ANA's partnership with StarFlyer boosted load factors by about 10ppt. At Air Do, which operates many regional routes, about 30% of the airline's revenue is from ANA codeshares.

Before abiding by perhaps convoluted codeshare sale rules, Skymark's IT would need to be overhauled to support codeshares.

See related reports:

Change would come to ANA, and unfortunately to Skymark, but other impacts confined

ANA once again finds itself in a position it has been in before, to take a smaller carrier under its wing. But with Skymark the opportunities are greater, but equally is the necessary work - and cash required. The complicated nature of the deal in the unique Japanese market may eventually prevent the deal from maturing.

Were it to proceed, numerous options could unfold. The intricacy of the Japanese market - which has a habit of keeping airlines from dying - means ANA and Skymark may need to attempt something unprecedented.

For Skymark and Mr Nishikubo, the outcome be the airline's survival but that would inevitably involve reduced independence. Were it not for the A380 orders, Skymark likely could have continued to grow with merely incremental changes to its business; it would have gained little from being affiliated with ANA, as opposed to retaining its independence. The A380 cancellation has however changed all that.

An ANA-Skymark partnership could change the position of each going forward. Yet potential impacts on others would be limited. A full ANA-Skymark merger would not occur, limiting synergies. Skymark and the regulatory environment would ensure Skymark has to function on its own and not rely exclusively on ANA. ANA is unlikely to radically overhaul its business and cost structure based on Skymark's relative discipline, even if doing so would significantly impact JAL and the LCC startups. But such change would be totally out of character for ANA. ANA's AirAsia Japan/Vanilla Air venture demonstrates its difficulty on a small scale, let alone with Skymark's 30-plus fleet and much greater market presence.

For the market overall, the upside is perhaps for a greater segregation between the ANA/JAL full-service families and their LCC start-ups. The distinction could make clear to the market who is who and what to expect from different price points. The no-frills LCCs have had to work hard to educate the market, and will likely take longer to catch on before the eventual inevitable acceptance.

As Skymark potentially joins Air Do and StarFlyer in being taken under ANA's wing, the challenge would be to grow beyond having a niche as a subsidiary. Skymark has made a costly error, against the advice of most observers, but Skymark has undoubtedly brought pro-consumer change and has potential to deliver more. Skymark should not be forever condemned to Japan's airline half-way house. The alternative scenario - of Skymark exiting the market - is not in any way attractive, at least for consumers and the overall market.

But a great gulf remains in thinking between the proponents in this potential partnership. Building a sufficiently large bridge, in a relatively unknown and unhelpful environment, will be a severe challenge.

To learn more about Skymark and Japan's aviation market and to meet all of Asia's key aviation players, sign up now to be part of CAPA's three day Asia Aviation Summit and LCC Congress, plus a full day of corporate travel at Singapore's Capella Sentosa 13-15 October, 2014: https://centreforaviation.com/events/upcoming/

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