Airline News
Delta offers Skymark investment lifeline
July 20th 2015
The Nikkei Asian Review (NAR) has named Delta Air Lines as a potential investor in Japan’s bankrupt Skymark Airlines, adding to the controversy about who should control the reins at the Tokyo-based carrier and have access to valuable slots at the city’s downtown Haneda Airport. Read More »
The development will potentially increase competition in Japan by allowing Delta to funnel international travellers via Tokyo to Japanese cities served by Skymark. The deal is reported to give Delta an approximately 20% stake in the carrier, although terms must still be concluded and approved by Skymark's creditors, according to the report by the NAR. "It would be premature for us to comment on the matter," a Delta spokesman said, although Delta president, Ed Bastian, last month said the Atlanta-headquartered carrier had been approached about making the investment.
If signed up, the deal would help Delta turn Haneda into a transit hub for passengers coming off its flights from the U.S. The Atlanta headquartered carrier has no landing rights at Haneda. The U.S. Department of Transportation ordered it to drop the Haneda-Los Angeles route from October 1 after it found Delta underutilized its traffic rights by not operating a daily service into Tokyo. Delta’s Haneda slots have been given to American Airlines, as Delta appeared to be looking rather at China for growth. The airline’s chief, Richard Anderson, told staff in May the carrier “needed a hub in Shanghai like the one [it has] in Amsterdam”.
An investment in Skymark could be lucrative for Delta, given the Skyteam carrier has no alliance partner in Japan, unlike its U.S. rivals United Airlines and American Airlines, which have local partners in All Nippon Airways (ANA) and Japan Airlines (JAL), respectively.
There are two restructuring plans for Skymark. One involves ANA Holdings and one proposed by Intrepid Aviation, Skymark’s largest creditor. Airbus, the carrier’s second largest creditor, has displayed a reluctance to support the ANA-backed plan and could vote for Intrepid’s proposition at the August 5 meeting of creditors. Both plans, or a potential new deal involving Delta, will be put to a vote on that date.
