TOKYO--All Nippon Airways Co. (9202.TO) will start discussions
with struggling Skymark Airlines Inc. (9204.TO) about a possible
tie-up next week, creating an unusual situation in which the
nation's two biggest airlines are considering providing support to
the same smaller carrier.
The move follows similar talks between Skymark and ANA's rival,
Japan Airlines Co. Ltd. (9201.TO), that began in November.
ANA received the request for code sharing from the budget
carrier Wednesday, and will work out details in talks starting next
week, the company said.
The decision comes as Skymark has fallen into trouble, with
Airbus Group NV (AIR.FR) cancelling the airline's order for six
A380 superjumbo jets earlier this year, asking Skymark for
"exorbitant" cancellation fees after saying it had failed to live
up to contract terms.
The Ministry of Land, Infrastructure, Transport and Tourism has
been reluctant to approve Skymark's business partnership with JAL,
which underwent court-led rehabilitation in 2010.
JAL, which is under government supervision and backed by public
money, is required to report to the ministry until fiscal 2016 on
any new investment or acquisition plans.
While Skymark is struggling financially, it holds a valuable
asset--36 slots at Tokyo's Haneda airport, which has convenient
access to the capital but a shortage of capacity.
ANA will likely consider a deal positively, but it wouldn't go
into effect at least until March, said one person familiar with the
matter.
Skymark's Haneda slots could be more beneficial to JAL, which
has only five spots there, compared with ANA's 11.
Despite projecting a net loss for the second straight year,
Skymark is trying to keep its financial independence and doesn't
plan to ask for capital injections from other airlines, a
spokeswoman said.
The budget carrier will also seek funds in January or February
by allocating new shares to investment funds.
In recent restructuring efforts, Skymark decided to pull out of
Narita International Airport outside Tokyo, cutting domestic routes
and raising fares.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
