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29-Jan-2015 11:31 AM

Skymark Airlines becomes second Japanese airline to file for bankruptcy protection in five years

Skymark Airlines filed (28-Jan-2015) for bankruptcy protection under the Civil Rehabilitation Law with the Tokyo District Court following an emergency board meeting on 28-Jan-2015, becoming the second airline bankruptcy in Japan in five years after Japan Airlines filed for bankruptcy protection in 2010. Investment fund Integral Corporation will finance and help the carrier continue operations. The factors in its decision to file for bankruptcy protection include increasing competition from more recently established LCCs, increased fuel costs, higher than expected introduction costs of new A300-330 aircraft and declining load factors. The carrier is also facing penalties from Airbus for a cancelled order for A380 aircraft. The carrier’s total liabilities is at JPY71,088 million (USD711 million). Skymark, in the six months to 30-Sep-2014, burned JPY2.5 billion (USD25 million) in cash reserves. Its predicted record loss of JPY13.7 billion (USD137 million) for FY2014 ending Mar-2015 is expected to be even greater. Skymark currently operates 23 nonstop services covering domestic destinations using a fleet of five A330-200s and 27 Boeing 737-800s. The carrier employs around 2200 staff. Meanwhile, the carrier will be delisted from the Tokyo Stock Exchange on 01-Mar-2015. The carrier has also deferred the release of its financial results for nine months ended 31-Dec-2015 to 05-Feb-2015. Commenting on the filing, Airbus said it was aware of Skymark’s filing adding, “this is now a matter for the courts". [more - original PR - Japanese]

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