Japan budget airline short of pilots, shares dive

TOKYO, June 3 (Reuters) - Skymark Airlines (9204.T: Quote, Profile, Research, Stock Buzz), a discount domestic carrier, will cancel 168 flights in June due to a shortage of pilots, sending its shares to their lowest level this year.

The shortage comes after two pilots retired at the end of May, and the cancellations account for about 10 percent of all its scheduled flights this month, affecting four routes and about 9,000 passengers, Skymark said.

"With the absence of two pilots, we could expect some unexpected flight cancellations, and we decided it would be better to cancel them ahead of time to limit further problems for our customers," said Skymark spokesman Shuichi Aoyama.

He said it was still unclear whether its flight schedule would go back to normal in July.

Skymark said it was in the process of switching all of its fleet from Boeing 767 aircraft to smaller and more fuel-efficient Boeing 737 aircraft by 2010, but the two pilots who retired had licenses for the 737.

"The battle to secure pilots is accelerating in Asia as the number of discount airlines increases due to emerging economies such as China and Southeast Asian countries," Aoyama said.

Shares of Skymark ended the morning session down 8.5 percent at 195 yen, compared with a 1.5 percent fall in the benchmark Nikkei average .N225. (Reporting by Aiko Hayashi; Editing by Hugh Lawson)