Delta Air Lines Inc (DAL.N) has offered to invest in Japan's bankrupt Skymark Airlines Inc SKALF.PK as part of a restructuring plan for the budget carrier, according to a Japanese media report.
The move has the potential to increase competition in Japan by allowing Delta to funnel international travelers via Tokyo to more Japanese cities that Skymark serves. A deal would give Delta a roughly 20-percent stake, although terms must still be concluded and approved by Skymark's creditors, according to the report by Nikkei Asian Review.
A Delta spokeswoman said, "It would be premature for us to comment on the matter." Delta's President Ed Bastian said last month that the Atlanta-based airline had been approached about making the investment.
Skymark could not immediately be reached for comment.
Skymark holds many landing slots at Tokyo's Haneda Airport, which connects to cities throughout Japan and which many travelers prefer to Narita International Airport because it is closer to Tokyo's downtown. Skymark's slots are for domestic routes only.
If the deal succeeds, Delta could attempt to build Haneda 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.
Rival U.S. carrier United Continental Holdings Inc (UAL.N) has an alliance with Japan's ANA Holdings Inc (9202.T), and rival American Airlines Group Inc (AAL.O) has an alliance with Japan Airlines Co Ltd (9201.T).
Planemaker Airbus Group SE (AIR.PA) and aircraft lessor Intrepid Aviation Ltd (INTR.N) are the biggest creditors to Skymark, which ran into financial trouble after embarking on an ambitious expansion that included buying Airbus A380 jumbo jets.
There are two restructuring plans for Skymark currently on the table, one involving ANA Holdings investing in Skymark, and one proposed by Intrepid.
Creditor approval is key for either Skymark restructuring plan to go ahead.
(Reporting By Jeffrey Dastin in New York; Editing by Diane Craft)