Skymark Airlines informations and photos

Skymark Airlines Inc. (スカイマーク株式会社, Sukaimāku Kabushiki-gaisha) (TYO: 9204) is a Japanese low-cost airline headquartered at Haneda Airport in Ōta, Tokyo, Japan. It operates scheduled services with a main base at Haneda Airport, but is also the dominant carrier at Kobe Airport, and the only Japanese airline offering regular scheduled services at Ibaraki Airport north of Tokyo.

Skymark was the first low-cost airline established in Japan, and is the only carrier offering domestic flights at Haneda Airport in competition with the duopoly of All Nippon Airways (ANA) and Japan Airlines (JAL). Internet entrepreneur Shinichi Nishikubo controlled the company from 2003 to 2015, when the carrier filed for bankruptcy protection after attempting a fleet and service expansion.

In August 2015, Skymark creditors agreed to restructure the airline under the control of Japanese private equity fund Integral Corporation (50.1%), with minority investments from All Nippon Airways (16.5%), Sumitomo Mitsui Banking Corporation and the Development Bank of Japan (33.4%). It remains the largest independent airline in Japan and the only independent low-cost carrier, as other low-cost carriers in Japan are controlled by either ANA or JAL.

Skymark Airlines was founded in November 1996 as an independent domestic airline after deregulation of the Japanese airline industry and started operations on 19 September 1998. It was originally owned by a consortium of investors led by the travel agency H.I.S. and headed by H.I.S. president Hideo Sawada; another major early investor was the leasing company Orix. Its initial business plan called for it to be headquartered at Itami Airport in Osaka. Takashi Ide, former head of British Airways' operation in Japan, was hired as the company's CEO in 1998.

Skymark was able to obtain six slots at Haneda Airport in Tokyo in March 1997 and moved its headquarters to the Hamamatsucho district of Tokyo in March 1998. Its first scheduled flight from Haneda to Fukuoka was on 19 September 1998; it added routes from Itami to Fukuoka and Sapporo in 1999, but suspended these routes in 2000 in order to offer more frequencies on the Haneda-Fukuoka route.

In 2002, Skymark took delivery of a third Boeing 767 aircraft and began service on the Haneda-Kagoshima route, as well as charter service from Haneda to Seoul. In 2003, with a fourth 767 dry-leased from All Nippon Airways, it began service to Aomori and Tokushima.

The airline incurred considerable losses in its first few years of operations. It briefly considered a recapitalization led by Commerzbank but decided not to accept such an investment due to Air Do's issues with banks interfering in management. In August 2003, Sawada invited internet entrepreneur Shinichi Nishikubo to become Skymark's largest shareholder with a personal cash investment of 3.5 billion yen (having made around 9 billion yen from the IPO of his internet company in 2000). Nishikubo took over as CEO in 2004, maintaining Ide as a "co-pilot" due to Ide's experience in the aviation industry.

On 11 December 2003, Skymark announced that it expected a profit of 470 million yen for the half-fiscal year ending on 31 October, the first profit made since the airline began operations. By using more efficient aircraft and systems developed in-house, Skymark attempted to undercut JAL and ANA on costs in order to offer lower fares.

Skymark had a code sharing partnership with Japan Airlines starting with a Haneda-Osaka Kansai service in 2005–06, and later on the Tokyo Haneda-Kobe route from Kobe Airport's opening in 2006. JAL withdrew from Kobe in 2010, while Skymark developed Kobe into a secondary base. Skymark purchased the naming rights for the Kobe Sports Park Baseball Stadium from 2005 to 2010.

Skymark announced in April 2010 that it would commence a "Narita Shuttle" service from Narita International Airport to Asahikawa, Sapporo, Fukuoka, and Okinawa in late 2011 and early 2012.

In November 2010 Skymark announced negotiations with Airbus for an order of four Airbus A380 aircraft and two options, making it the first Japanese airline to order the type. The airline announced its intent to use the aircraft on long-haul trunk routes out of Narita Airport such as London, Frankfurt, Paris and New York, and that they would be operated in a two-class, 394-seat configuration – with 114 seats in business class and 280 in a premium economy class. Nishikubo envisioned an unheard-of fully-flat product in economy class, which the Skymark team calculated would break even at a one-way fare of 100,000 yen.

As Skymark began to prepare for international service, it began to face stiff competition from a new group of low-cost carriers in Japan beginning in 2012, particularly from AirAsia Japan (later Vanilla Air) and Jetstar Japan at its Narita base. This led to a reduction in Skymark's frequencies on highly contested routes such as Narita-Sapporo and Narita-Fukuoka, and a refocusing of aircraft on more exclusive routes such as Narita-Ishigaki.

Skymark attempted a more competitive domestic offering by executing leases for seven Airbus A330-300 aircraft in July 2012. Skymark announced that it would outfit these aircraft in a 271-seat single-class premium configuration with 38-inch seat pitch and 22-inch seat width, tentatively called "Green Seats" and comparable to the domestic "Class J" offering on Japan Airlines, to win market share among business travelers on the key domestic trunk routes from Tokyo to Fukuoka and Sapporo. Skymark also had plans to install "Green Seat" cabins on its 737 fleet to create a 2-class configuration but cancelled the plan in early 2014 in favor of keeping a single-class 737 fleet for competition with other LCCs.

Somewhat controversially, Skymark announced that A330 flight attendants would wear miniskirt uniforms, in contrast to Skymark's usual polo shirt uniforms, for the first six months of operation of each route. The Japan Federation of Cabin Attendants publicly complained about the idea, claiming that the uniforms were unsafe to the women wearing them and would lead to harassment and objectification.

Starting in 2013, Delta Air Lines was highly interested in starting a codeshare agreement with Skymark, mainly due to Delta's expansion of its own Tokyo services. Following ANA's investment in Skymark however, the possibility of a codeshare agreement and further partnership with Delta was reduced.

Skymark's finances were hit hard by foreign exchange rate fluctuations. In February 2011, when Skymark placed its initial A380 order, the Japanese yen was trading at historically high levels of around 82 yen to the U.S. dollar. After the introduction of the Abenomics policy in late 2012, the yen plunged in value, reaching around 102 yen to the dollar in early 2015. Many of Skymark's major investments and expenses were denominated in dollars—including the A380 orders, the A330 leases and its fuel costs—while its domestic ticket revenue was in yen, and the airline did not engage in exchange rate hedging. Skymark recorded its first net loss in five years for the March 2013 – 2014 fiscal year.

In early February 2014, Skymark announced that it would downsize the Narita operation to only three destinations (Sapporo, Yonago and Okinawa). Nishikubo stated that the base lost money in every month except August and that all LCCs were under pressure there. He also expressed some reservations about the A330 fleet plan, stating that while the airline had funding in place for the first two aircraft, the third and subsequent deliveries could be impacted by the performance of Skymark's domestic operation as well as the success of its initial international service. Skymark planned to re-deploy 737s from the Narita and Haneda bases for charter services to destinations such as Guam.

Airbus completed Skymark's first A380 in April 2014 and sent the aircraft to Germany for cabin installation.
In May, Skymark requested to reschedule a meeting with a European bank involved in financing of its A380 order. Airbus interpreted this as a signal that Skymark sought to renegotiate the contract, and sent a team of financial advisors to Skymark's head office in June. After a week of meetings, they proposed an amendment of the A380 purchase agreement, with the condition that if Skymark did not meet a certain revenue target, Nishikubo would be required to sell his shares to an outside investor chosen by Airbus. Nishikubo rejected this proposal in early July, believing there was a significant chance that Skymark would miss the target.

In late July, Airbus announced that it had terminated the airline's A380 orders, citing concerns over the airline's ability to fund the purchase in light of its poor financial performance. Nishikubo complained the airline was not given the opportunity to revise the contract, but simply received a fax notifying it of the termination. After further negotiations, Airbus sued Skymark for damages in a London court; it was reported that Skymark had already paid Airbus 26.5 billion yen for the aircraft and could face up to 70 billion yen in penalties.

Complete article available at this page.