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Skymark files for bankruptcy

January 28, 2015

Japan's third-largest carrier, Skymark Airlines, has filed for protection from creditors as it faces potentially massive penalties. It ran into trouble over a canceled jet order with European plane maker Airbus.

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Maschine von Skymark Airlines
Image: AFP/Getty Images/Y. Tsuno

Skymark's filing for bankruptcy Wednesday came less than a month after Japan's third-biggest airline admitted that European plane maker Airbus was planning to sue it over a collapsed deal.

In July of last year, Airbus SAS terminated an order from Skymark for six A380 jets and was seeking $700 million (620 million euros) from the Japanese carrier for contract violation.

The latter said it had tried to renegotiate the order because of the then surging fuel costs and intensifying competition, but later abandoned the deal.

Uncertain future

"The company has now come to the conclusion that it will be extremely difficult to rehabilitate itself on its own," the airline said in a statement after filing for protection from creditors with the Tokyo District Court.

Skymark's president, Shinichi Nishikubo, who rejected Airbus' call to merge with a larger rival, resigned Wednesday, the carrier announced in a separate statement.

The airline said it now had debts topping $603 million and faced possible compensation costs of as much as $700 million linked to the axed Airbus deal.

Skymark was born out of deregulation measures in the 1990s that were aimed at challenging ANA's and JAL's control on the market. It has operated domestic flights in and out of Haneda Airport, just a short train ride from central Tokyo. The carrier has about 2,200 employees.

hg/bk (AFP, dpa)