TOKYO—Delta Air Lines Inc. offered to support Japan's
financially troubled Skymark Airlines Inc., a proposal that would
give the U.S. carrier a stake in the domestic Japanese market.
Skymark, Japan's No. 3 airline by passengers flown, has been
searching for a path to rehabilitation since filing for bankruptcy
protection in January. Management has proposed giving a leading
role to ANA Holdings Inc., which along with Japan Airlines Co.
dominates domestic air travel.
But the ANA-centered plan has run into opposition from Skymark's
largest creditor, U.S. aircraft-leasing company Intrepid Aviation,
which said Wednesday that it would offer an alternative plan
working with Delta.
If approved by creditors, the Intrepid-Delta plan would give
foreign investors a foothold in some of the world's busiest air
routes, including Tokyo-Fukuoka. It would also give Delta a
long-sought partner. ANA is already allied with United Continental
Holdings Inc., while Japan Airlines has teamed up with American
Airlines Group Inc.
"We have been looking for an opportunity to have an alliance
partner in Japan," said Masaru Morimoto, Delta's managing director
for Japan, at a news conference.
Mr. Morimoto declined to specify the size of the stake Delta is
seeking. The maximum foreign ownership permitted is 33.3%. Mr.
Morimoto said Delta is willing to help Skymark create a new
business model that would include a mileage program and
standardized reservation system.
Skymark's slots at Tokyo's Haneda airport are especially
attractive for Delta. Skymark controls 36 arrival and departure
slots at Haneda that are for domestic flights only. That is about
8% of the airport's domestic slots.
Under transport-ministry rules, if a carrier owns more than 20%
of another airline that holds Haneda slots, those slots might have
to be returned—a restriction that could keep Delta's stake in
Skymark at 20% or below.
A Delta-Skymark alliance wouldn't solve all of the U.S.
airline's problems in Japan. Most of Delta's flights to Japan
arrive at Narita airport, about 90 minutes away from Haneda by
train, meaning it wouldn't be easy for Delta travelers to make
Skymark connections.
Mr. Morimoto said Delta is looking to the longer term,
suggesting that the Skymark alliance could be more useful if the
day comes when Delta can fly more popular international routes to
Haneda.
ANA said it believes it remains the best candidate to sponsor
Skymark's journey out of bankruptcy court, given its experience in
helping other airlines. A JAL spokesman said it is ready to compete
regardless of who wins control of Skymark.
The bankrupt airline's creditors are slated to choose between
the two rehabilitation plans at an Aug. 5 meeting. Absentee ballots
will be accepted through July 24.
Intrepid, the leasing company and Skymark creditor, initially
supported ANA's participation in Skymark's restructuring. Intrepid
and ANA discussed a deal under which ANA would pick up the lease on
seven aircraft that Intrepid had been leasing to Skymark. After
that deal fell through, Intrepid decided to look for other
options.
Intrepid president Franklin Pray said Delta doesn't plan to
lease the planes from Intrepid.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
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