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Japan's Skymark will be launched in 1998

Paul Lewis/SINGAPORE

A Japanese business consortium has formally launched Skymark Airlines as the country's next planned carrier to compete for the world's second- largest domestic air-travel market.

Skymark Airlines plans to take to the air early in 1998, equipped with three leased Boeing 767s. The start-up carrier will be based at Osaka's Itami Airport and fly initially to Tokyo's Haneda Airport, and later Sapporo. Other likely domestic destinations will include Okinawa and Fukuoka.

The airline consortium consists of around 11 partners, led by local travel agent and 58.7% stakeholder HIS Travel. Japanese aircraft-leasing company Orix holds a 6.7% share, with the remaining backers including a Japanese securities firm, cellular telephone company and employment agency.

The carrier is aiming at the low-cost market, with air fares some 50-60% lower than current levels. It plans to keep its operating costs down by outsourcing services such as maintenance, and by contracting foreign pilots. It expects to keep its own workforce down to around 150 employees. Other cost savings will be achieved through the consortium partners - the lead partner is a travel agent enabling the airline to deal directly with customers, while the involvement of lessor Orix may allow lower aircraft-lease rates to be secured.

According to Skymark president Junichi Okawara, it is intended to float the company within five years.

A preparatory operational plan is now being drawn up for submission in the first quarter of 1997 to Japan's Ministry of Transport (MoT) for approval and issue of an operating license. A key test for Skymark will be the MoT's allocation of up to 40 extra new daily slots at Haneda, which will be created by the opening of a second re-built runway in April 1997.

It is not clear whether the Government will reserve any of the slots in advance of Skymark's entry into service the following year. Competition among the three incumbent airlines is already intense, with Japan Airlines (JAL) and All Nippon Airways (ANA) laying claim to the bulk of the slots.

At the same time, Skymark claims that it will need more than the ten slots, which the Government has hinted it may put aside for start-up carriers, if it is to fly beyond Haneda and Itami. More slots at Haneda are planned to be added later in 1998 and again in 2000.

Another major issue still be settled is the maintenance of Skymark's fleet. The airline has approached JALand ANA, and sources suggest that the latter's existing maintenance and overhaul base at Itami makes it the more likely choice.

JAL has had its application to fly five additional services over Siberia to Italy rejected by Russia, in a tit-for-tat retaliation for Japan's refusal to allow Aeroflot Russian International Airlines access to Sapporo's Chitose Airport. The Japan Defence Agency blocked Aeroflot's application, saying that it would compromise security at the adjacent Chitose air base.

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