Skymark Surges After Report A380 Fine Limited to PrepaymentsChris Cooper
Skymark Airlines Inc., Japan’s third-largest carrier, surged the most in six weeks after the Asahi newspaper reported Airbus Group NV agreed to limit a penalty after canceling the carrier’s orders for A380 planes.
Skymark rose 8.4 percent, the most since Aug. 22, to close at 220 yen in Tokyo trading today. The shares have tumbled 43 percent this year.
Skymark has agreed to pay between 20 billion yen ($184 million) and 23 billion yen, the amount of prepayments for the double-decker planes, to Airbus, the Asahi reported, without saying where it got the information. The aircraft maker, which had initially demanded as much as 70 billion yen, and Skymark are aiming to make a final agreement this month, the paper said.
The carrier met with Airbus last month and is negotiating to reduce the amount of the penalty so it doesn’t affect its business, the Tokyo-based carrier said yesterday. Skymark said in July there was “material uncertainty” over whether the company will remain a going concern as the airline may have to pay a “large amount.”
Airbus’s Tokyo-based spokeswoman Utako Fujiso declined to comment on the matter. Skymark said nothing has been decided yet, according to a statement to the Tokyo Stock Exchange.
Skymark has said that the carrier paid 26.5 billion yen for Airbus double-decker planes, which includes payments to the engine maker, and that the money may not be returned.
Airbus terminated the order for six A380s -- worth $2.5 billion in list prices -- in July. The aircraft maker said its decision to cancel the orders stemmed from “the airline’s expressed intentions for the aircraft.”
Skymark President Shinichi Nishikubo said the two sides had been in talks since April, after the carrier told Airbus it needed to alter plans on introducing the plane because of a weaker yen and competition.