TOKYO (REUTERS) - Japanese discount airline Skymark Airlines Inc is preparing to file for bankruptcy protection from creditors under Japan's Corporate Reorganisation law, people familiar with the matter said on Wednesday.
Skymark, struggling with rising operating costs and intensifying competition, had projected a record net loss of 13.6 billion yen (S$156 million) for the business year ending in March.
The company's board will meet on Wednesday evening to approve the bankruptcy decision, the sources told Reuters on condition of anonymity. Company press officials could not immediately be reached for comment.
Established in 1998, Skymark was a rare example of a Japanese budget carrier surviving without any affiliation with either ANA Holdings or Japan Airlines Co.
But tough competition from the country's dominant carriers pushed Skymark into deep losses.
In a December bid to find a lifeline, the company said it would hold talks with ANA on code-share flights and seek fresh funds from investors.
Skymark's inability to keep up with payments pushed Airbus Group NV to cancel a US$2 billion (S$2.7 billion) contract for six A380 superjumbo passenger jets in July. Airbus sued carrier over the cancellation in December.