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UPDATE 2-Delta proposed as a sponsor for Japan's Skymark Airlines
July 15, 2015 / 2:20 AM / 2 years ago

UPDATE 2-Delta proposed as a sponsor for Japan's Skymark Airlines

* Rival plan has put forward ANA as sponsor

* Creditors to vote on rival rehabilitation plans by Aug 5

* Move may enable Delta to build Haneda as transit hub (Adds Intrepid’s offer to forgive debt, comments)

TOKYO, July 15 (Reuters) - Delta Air Lines has been proposed as a sponsor to rehabilitate Skymark Airlines Inc by the bankrupt Japanese carrier’s biggest creditor - a plan that challenges a separate proposal that has put forward ANA Holdings as a sponsor.

If the move is approved by a majority of creditors, it could help Delta use Tokyo’s Haneda airport as a transit hub for passengers coming off its flights from Los Angeles. Currently, Delta’s connecting opportunities are limited because it has no alliance partner in Japan.

Skymark’s creditors are slated to vote on the rival plans by an Aug. 5 meeting of debt holders. Both plans would likely result in the winning sponsor taking a stake of under 20 percent in the discount airline.

Airline leasing firm Intrepid Aviation, Skymark’s biggest creditor, said it had conducted a thorough process to identify the strongest sponsor candidate.

As an incentive for other creditors to adopt its plan with Delta as the sponsor, Intrepid in its rehabilitation plan said it would withdraw a demand that Skymark pay it 30 billion yen ($242.91 million).

“We feel confident that this plan provides a better solution to the creditors, so we are quite hopeful that the plan will be accepted,” Franklin Pray, Intrepid President and CEO, said at a press briefing in Tokyo.

The rival plan promoting ANA, Japan’s biggest carrier, as sponsor is backed by Skymark and domestic private equity firm Integral Corp.

For ANA, gaining a foothold in Skymark would give it access to additional landing rights at Haneda, where along with its affiliates, it already holds more than half the 486 slots, most of them for domestic routes, helping cement its dominance of air travel in Japan.

A spokesman for ANA, which has offered to buy a 16.5 percent stake the in discount carrier, said that its stance was unchanged after Delta stepped forward. “We have the experience and are in the best position to support Skymark,” he said.

Intrepid, Skymark’s biggest creditor, holds 38.1 percent of Skymark’s debt, followed by European aircraft maker Airbus Group with 28.9 percent and jet engine maker Rolls-Royce Holdings with 15.7 percent.

Skymark holds 36 landing slots at Tokyo’s Haneda Airport, which connects to cities throughout Japan and which many travellers prefer to Narita International Airport because it is closer to central Tokyo.

Skymark Airlines ran into financial trouble after an ambitious expansion that included buying Airbus A380 jumbo jets. It filed for rehabilitation proceedings in late January. ($1 = 123.5000 yen) (Reporting by Tim Kelly and Ritsuko Ando; Editing by Edwina Gibbs and Christopher Cushing)

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