|Skymark Airlines surges on AirAsia takeover report
Shares in Skymark Airlines surged Tuesday after a report that Malaysia's AirAsia may buy the struggling Japanese carrier, which was left reeling after a collapsed jet order with Airbus last month.
The Tokyo-listed stock jumped 27.77 percent to 230 yen in morning trade, its maximum allowable single-day gain, on the report in Japan's leading Nikkei business daily.
The story, which cited unnamed sources, said AirAsia was in talks with its lenders over a possible takeover bid for money-losing Skymark, although the putative takeover target questioned the report.
"We're not aware that there is any truth in what has been reported,'' Skymark said in a statement.
AirAsia could not be reached for comment.
In the wake of its bitter split last year with All Nippon Airways (ANA) over a budget carrier joint venture, AirAsia has announced it would jump back into the Japanese market in a tie-up with e-commerce giant Rakuten.
The low-cost carrier may create a new local subsidiary, partly backed by Rakuten, to launch a bid for Skymark to get around restrictions on foreign ownership in Japanese airlines, the Nikkei said.
Skymark was born out of deregulation measures in the 1990s which were aimed at challenging ANA and rival Japan Airlines' control of the market.
But the carrier has been reporting ballooning losses as new entrants into the budget sector hurt its business.
The airline was sideswiped when Airbus last month said it had cancelled a US$2.2-billion jet order with the carrier, apparently over concerns about getting paid.
Skymark shares had lost more than 40 percent at one stage following the collapsed deal.
The company said the European aviation giant had threatened it with ''overpriced'' penalties and called on it to merge with a bigger airline, a proposal which Skymark's top executive flatly rejected.
The Nikkei report also said AirAsia, a major Airbus customer, had approached the plane maker about reducing the cancellation penalties.
Skymark has said it was mulling the cutting of unprofitable routes and borrowing more money from its banks to stay afloat. --AFP