DL a potential suitor for Skymark?

[metopower]

This whole thread is just a venting point for anti DL and anti WT posters. IF this had been anything the DL crew would have been removed and the flight cancelled. That is the rules here . I should know i was a LCA ( check pilot) .Question is how far and how fast was the WN aircraft going? How did they abort? How hot did their brakes get? Did they deploy reverse thrust? Change flap settings while this happened?Were they removed ? All things that would trigger re dispatach or aircraft change. This stuff should never happen but it does everyday.( Call sign confusion ) The mod  should lock this thread .It is a waste of time. lets see how long this lasts before deletion and more warning points? 

 

[FWAAA]

This whole thread is just a venting point for anti DL and anti WT posters. IF this had been anything the DL crew would have been removed and the flight cancelled. That is the rules here . I should know i was a LCA ( check pilot) .Question is how far and how fast was the WN aircraft going? How did they abort? How hot did their brakes get? Did they deploy reverse thrust? Change flap settings while this happened?Were they removed ? All things that would trigger re dispatach or aircraft change. This stuff should never happen but it does everyday.( Call sign confusion ) The mod  should lock this thread .It is a waste of time. lets see how long this lasts before deletion and more warning points?

Sorry, Captain, but you posted this in the wrong thread; obviously, you intended to post in the WN/DL MDW close call thread, but you must have mis-read the topic title. This thread is about Skymark, the Japanese carrier in bankruptcy.

The irony is pretty sweet - even you have to admit that. Delta pilot mistake. Just kidding - you're one of the good guys.

 

[700UW]

This whole thread is just a venting point for anti DL and anti WT posters. IF this had been anything the DL crew would have been removed and the flight cancelled. That is the rules here . I should know i was a LCA ( check pilot) .Question is how far and how fast was the WN aircraft going? How did they abort? How hot did their brakes get? Did they deploy reverse thrust? Change flap settings while this happened?Were they removed ? All things that would trigger re dispatach or aircraft change. This stuff should never happen but it does everyday.( Call sign confusion ) The mod  should lock this thread .It is a waste of time. lets see how long this lasts before deletion and more warning points?

And this has what to do with DL and Skymark?

 

[metopower]

Sorry, Captain, but you posted this in the wrong thread; obviously, you intended to post in the WN/DL MDW close call thread, but you must have mis-read the topic title. This thread is about Skymark, the Japanese carrier in bankruptcy.The irony is pretty sweet - even you have to admit that. Delta pilot mistake. Just kidding - you're one of the good guys.

So are you... And it is ironic.!

 

[WorldTraveler]

meto's point is valid regardless of what thread he posts in.....


as for DL and Skymark, I'm not sure how much int'l authority Skymark has and what remains but it isn't a given at all that Skymark could allow DL to shut down its NRT hub.

and let's keep in mind that Skymark has over $2 billion in debt. DL can spend a whole lot of money developing nonstop flights from the US to other points in Asia to avoid NRT for the price of investment in Skymark.

Skymark's biggest asset to DL would be to provide domestic feed and I'm not sure if that is really worth it or not. Given that DL is a very analysis driven airline, they are going to do what makes the best financial sense for the long-term.

As for the size of DL vs. other carriers, you seem like you have a bug up your backside about JVs and what they get counted for or not.

It is not I but government authorities esp. the DOT and DOJ that consider whether a US airline has an immunized partner in determining what kinds of protection and authority that each carrier can have.

AA and JL are about the same size as DL to Hawaii at this point in terms of total seats which was expected to happen as DL shifts connecting capacity away from Tokyo and on to nonstop flights.

Further, while you and others think that Hawaii to Japan fares are junk, I'm sure you either don't know or choose to ignore that DL's average fares from Japan to Hawaii have LONG been higher than AA's average fares to the continental US. DL's average fares from Japan are well above AA and UA's averages and even though ALL carriers' average fares have come down, DL still gets a healthy premium both in total revenue and in average fares.

So, yes, DL is shifting traffic connecting traffic away from Japan and also shrinking capacity in the local market - but it hasn't so far materially affected DL's share of the local market nor has DL's revenue premium relative to other carriers changed significantly.

Thus, DL is looking at Skymark as a possibility to maintain a larger presence in Japan using Skymark feed to help some connections, but it is far from clear what restarting a BK airline can produce.

and finally, remember that NRT airport has asked to receive an offshare Customs and Border Patrol pre-clearance facility and DHS has selected them.

Thus, predictions of NRT airport's demise might have been greatly exaggerated if NRT originating passengers can arrive in the US as domestic passengers and create much faster than those from other Asian airports

 

[eolesen]

Conventional wisdom says that Airbus is partly responsible for the bankruptcy filing... In their desire to sell A380's, their sales force probably had wild projections showing how widebodies would pay for themselves, and Skymark's leadership took the bait hook, line, and sinker... Same thing with Intrepid and the A330's for their domestic trunk flying.

http://www.ft.com/cms/s/0/af9b6a1a-a86f-11e4-bd17-00144feab7de.html#axzz3dec9gVCC

The only way ANA gets shut out of the restructuring plan and DL has an opportunity is if Airbus and Intrepid continue to be able to continue to influence the mismanagement of Skymark's fleet planning. Any deal Airbus and Intrepid approve will likely require that their aircraft be used.

The airline was successful for ten years flying an all narrowbody operation. Widebody expansion almost killed them. It didn't help that both JL and NH got their LCC brands up and running at the same time they were adding the A330s, and the pricing on the new aircraft was in USD at a time when the yen was collapsing...

Their slots at HND are of value to another Japanese carrier, but if they stay independent of JAL & ANA and remain on the reckless course that got them where they are now, then the airline's franchise value is still zero or negative.

The best hope for the airline would be a plan where the creditors partially responsible for the situation are locked out of the decision process on the recovery plan. I don't know if Japanese law permits that, but it would probably be a better outcome.

 

[WorldTraveler]

good analysis, E, and you highlight how the lure of SJS (shiny jet syndrome) has killed more than one airline.... Skymark has deja vu qualities with something in India ....

and it is precisely because the people who got Skymark into trouble have to figure out how to put the business back on some sort of track while looking the creditors in the eye that DL might not want to be a part of trying to rescue an airline that was primarily domestic focused.

And Japan still has the problem of having to admit that their intentions of injecting competition into the Japanese airline duopoly have not been successful in part because they threw a lot of very valuable assets at a company that hasn't proven they are capable of managing them appropriately.

It might be that those Japanese airport assets might be valuable- remember that DL's investment in Virgin Atlantic largely matches the value of the landing slots at LHR that VS holds. If the values of the assets and the cost of recovery for DL can come close to matching, and that is most likely to happen if Skymark can operate a signficicant amount of international routes, there could be a deal for DL.... or NH could buy them solely for slot value and scrap most of the rest of the company.

 

[WorldTraveler]

it appears DL is moving forward with a stake in Skymark with up to 20% equity and provide DL with domestic Japan feed to its flights at NRT and HND.

http://asia.nikkei.com/Business/Deals/Delta-offers-to-sponsor-Skymark

 

[commavia]

As said elsewhere, I guess Delta continues to show interest in buying the loyalty of partners around the world - seems to make sense, and the strategy seems to have worked in locking up partners in strategically important markets (like Mexico and Brazil) where Delta is at a structural disadvantage to AA and/or United.  In this case, though, I'm struggling to understand the actual mechanics of how this is allegedly supposed to work. Given that Delta will soon have a single daily flight at HND that is horribly timed for two-way connectivity to domestic markets, and Skymark presently has zero presence at NRT (where Delta does actually have a meaningful presence), I don't understand the synergy to be allegedly had?  I'll be interested to hear more of the details.

 

[FrugalFlyerv2.0]

As said elsewhere, I guess Delta continues to show interest in buying the loyalty of partners around the world - seems to make sense, and the strategy seems to have worked in locking up partners in strategically important markets (like Mexico and Brazil) where Delta is at a structural disadvantage to AA and/or United.  In this case, though, I'm struggling to understand the actual mechanics of how this is allegedly supposed to work. Given that Delta will soon have a single daily flight at HND that is horribly timed for two-way connectivity to domestic markets, and Skymark presently has zero presence at NRT (where Delta does actually have a meaningful presence), I don't understand the synergy to be allegedly had?  I'll be interested to hear more of the details.

 
IMHO, the only good brand purchase DL has made so far were the LHR slots, ooops, I mean VS 
 
Unless there are some other upcoming transactions involving Skymark, DL, NH, JL and NRT / HND slots in the future, all this purchase does is really place a halo around DL's NRT crown (sort of the effect the Pan Am Shuttle network at LGA did to Pan Am network at JFK).  My $0.02.

 

[WorldTraveler]

obviously DL is not going to lay out its business plan as part of its proposal to participate in Skymark's restructuring.

I'm not sure how all of the pieces will fit together but it is absolutely true that DL's equity positions in AM, G3, and VS are achieving what DL wants... but these are extraordinarily complex transactions - just like the refinery - that take time to get all of the pieces lined up. The results aren't going to be apparent right away and neither is it necessarily impossible that DL could restructure its Asian operation around a revitalized Tokyo hub that includes Skymark feed to DL int'l flights at NRT plus Skymark's own brand (potentially with a heavy connection to the DL brand or even as a DL branded carrier on at least some of the routes - perhaps NRT operating under the DL brand, Skymark from Haneda). It isn't clear what DL will do but it there are alot of possibilities which likely include growing Skymark and aligning Skymark and DL objectives.

Further, DL's increased investment in Gol doesn't mean that the current partnership is not working - in fact the opposite is clearly the case based on the amount of passengers that connect between DL and G3. DL's increased investment is because of G3's own financial problems which provide DL the opportunity to increase its presence in S. America. DL's investment in each of these carriers is possible because they need help and DL provides a strategy that helps them while DL achieves its own objectives.

There are alot of things that have to happen for DL to sign a check but the fact that they are moving forward says they see something worth pursuing.

 

[eolesen]

Yeah, not understanding the "need" for domestic feed. IIRC, isn't DL already serving the largest domestic markets? That's where Skymark already exists.

Maybe DL is considering withdrawing more from Japan outside of TYO than they've let onto?

 

[metopower]

Yeah, not understanding the "need" for domestic feed. IIRC, isn't DL already serving the largest domestic markets? That's where Skymark already exists.Maybe DL is considering withdrawing more from Japan outside of TYO than they've let onto?

Just wondering? If DL extends credit to skymark in bankruptcy then do they become an equity holder? Then if or when skymark to satisfy creditors has to sell or release or rent assets ( hnd slot times) wouldn't a creditor get said assets before they would be returned to the Japanese gov? Just wondering

Still waiting

 

[jcw]

It depends on the agreement structured with the borrower and the prevailing laws of Japan - if DL gets itself high in the credit hierarchy and secures its loan against said assets then if skymark fails DL can lay claim

Although as we all know certain companies (especially airlines) are protected by their governments - another good example is what the U.S. did to the GM creditors - the governments actions in that case broke long standing case law and set back how creditors will view certain companies

Depending on how the Japanese govt views skymark will be critical to the outcome

 

[FrugalFlyerv2.0]

The results aren't going to be apparent right away and neither is it necessarily impossible that DL could restructure its Asian operation around a revitalized Tokyo hub that includes Skymark feed to DL int'l flights at NRT plus Skymark's own brand (potentially with a heavy connection to the DL brand or even as a DL branded carrier on at least some of the routes - perhaps NRT operating under the DL brand, Skymark from Haneda). It isn't clear what DL will do but it there are alot of possibilities which likely include growing Skymark and aligning Skymark and DL objectives.
 

 
Outsourcing.  That should do wonders in negotiations with DALPA (although they were almost willing to waive the white flag to the Frenchies (AFKL scope)).