Skymark Airlines Inc. (9204), the only Japanese carrier to order Airbus SAS A380s, is considering several options to raise funds as the budget airline lacks cash to pay for the superjumbos.
Sale-and-lease back of the aircraft and using finance from the European Credit Agency are among the options, Chief Financial Officer Masakazu Arimori said in Tokyo yesterday. Skymark aims to decide on financing by early next year and take delivery of its first Airbus plane in August or September, he said. The carrier will start flights to New York as early as December next year.
Keeping the A380 orders by Skymark is critical for Airbus as the planemaker wants to make inroads in Japan, a market its rival Boeing Co. (BA:US) has dominated as near monopoly for decades. Toulouse, France-based Airbus hasn’t won a single firm order for the superjumbo this year, while lessor Doric Lease Corp. said yesterday that it will target Asian carriers for the double-decker plane because of a surge in travel.
“We don’t want to put too much pressure on our cash flow,” Arimori said. “Almost all our profits are going to pay for the A380s.”
Skymark will need to invest 40 billion yen ($407 million) for the A380s next fiscal year, Arimori said. The Tokyo-based airline had 18 billion yen in cash at the end of September, according to a company statement yesterday. Skymark has already paid 12 billion yen for its first two of the six A380s it has ordered, Arimori said.
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The budget carrier raised 18.2 billion yen in May 2011, selling shares to pay for new aircraft and fund an overseas expansion.
Operators typically require two to three A380s to serve a given city pair, with the number depending on the distance of the flight and how fast an airline can turn around the plane.
Skymark fell 4.4 percent to 326 yen in Tokyo trading yesterday, extending the decline this year to 33 percent. The company made the announcements after the stock market closed for trading.
Last month, Airbus breached Boeing’s hold on the Japanese market winning its first order from Japan Airlines Co. The French planemaker won a commitment for as many as 56 widebody A350 aircraft.
Airbus plans to build 30 superjumbos a year. With about 150 A380s still on order, that suggests five years of work. The company plans to deliver A380s profitably from 2015, a year for which it still has some open manufacturing slots.
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