The concept of an “airline” is a familiar one: a single company operates specific aircraft to specific places, either regularly…
A Look at Skymark Airlines and the Extent of Their Bankruptcy
On the evening of Jan. 28, 2015, Skymark Airlines of Japan filed for bankruptcy protection in the Tokyo District Court, reporting 71 billion yen in liabilities The catalyst for this bankruptcy: an ambitious $1.7 billion dollar order for six Airbus jumbos and the sudden drop in value of Japanese yen. At unit price, an Airbus A380-800 costs $414.4 million a piece. As a budget airline, should they have expanded this fast in such conditions? The answer is simply, no. The airline had a history of financial struggles, but this is the worst one yet. Expanding so quickly results to lots of debt to pay off. Skymark hasn’t got the money to level out. Currently, the airline is desperately seeking a ‘business sponsor’ to help it emerge from bankruptcy.
Skymark airlines or Sukaimaku Kabushiki-gaisha began operations on Sept. 19, 1998 with seven Boeing 767-200 and Boeing 767-300 widebody aircraft. In 2005, Skymark began operating the 737-800. In 2009, the last 767 left the fleet after 11 years of service. In November of 2010, the airline negotiated with Airbus for an order of four A380 aircraft with two options. This was part of their international expansion to London, Paris, Frankfurt, and New York. These long-haul trunk routes would be operated with a 394-seat configuration featuring 280 in premium economy class and 114 in business class. The airline has bases established all around Japan including Naha, Kobe, Fukuoka, and Haneda. As of February of 2015, they have five Airbus A330-300’s and three more on the way and 27 Boeing 737-800’s and ten more on order. However, this will not be the same in March. Due to the financial crisis, Skymark has decided to ground all five A330-300’s. The Skymark’s objective was to compete with Japan’s leading airlines, All Nippon Airways (ANA) and Japan Airlines (JAL). In order to be a worthy competitor, Skymark needed to offer cheaper tickets for similar flights.
Rumors recently surfaced that the Japanese airline was talking to their rival airlines, ANA and JAL into investing in Skymark. The airline denied this rumor, but the word that ANA may invest is still spreading. To put Skymark Airlines into an aviation analogy, they reached V1, V2, struggled with V3, but it doesn’t look like they’ll be stowing their gear anytime soon.
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