The shares of Skymark Airlines have soared 28% on the Tokyo Stock Exchange following media reports of a possible acquisition by AirAsia.

The report citing AirAsia’s apparent interest appeared in Japan’s Nikkei Asian Review, citing unnamed sources. Neither AirAsia nor Skymark replied to queries from Flightglobal at the time of publishing.

If the report is true, it would mark an ambitious gamble on the part of AirAsia, which has struggled to break into the Japan market. A joint venture with All Nippon Airways fell through owing to differences in management styles and strategy.

In early July, AirAsia said it would set up a new carrier in 2015 with four Japanese firms: e-commerce provider Rakuten, consumer goods firm Noevir Holdings, sports equipment maker Alpen and Octave Infrastructure Fund.

AirAsia's acquisition record in other markets has met with mixed success. While it was able to obtain 85% of AirAsia Zest via its Philippines AirAsia unit, its efforts to obtain Indonesia’s now-defunct Batavia Air fell through in late 2012 owing to disagreements about pricing.

Skymark has struggled in recent months. On 1 August, it reported a first quarter 2014 operating loss of Y5.5 billion ($53.6 million), double its loss from the previous corresponding quarter.

The carrier attributed the weakness to costs associated with the introduction of Airbus A330-300s to its fleet, which have greater capacity that the Boeing 737-800s it operates.

Industry observers have long been concerned about the carrier’s widebody strategy. These concerns came to a head in late July, when Airbus cancelled Skymark’s confirmed order for six A380s.

Nikkei reports, however, that Skymark has 36 slots at Tokyo’s Haneda airport, which would be a powerful asset for a low-cost operator such as AirAsia.

Flightglobal’s Ascend fleets database shows that Skymark’s fleet is composed of 30 737-800s and three A330s. All of its aircraft are owned by lessors. Key lessors include AWAS (five 737s), Aviation Capital Group (five 737s), and GECAS (five 737s), and Intrepid Aviaton (three A330s).

Source: Cirium Dashboard