Skymark Airlines (BC, Tokyo Haneda) and ANA - All Nippon Airways (NH, Tokyo Haneda) have reportedly held talks which could eventually lead to ANA investing in the struggling domestic Japanese budget carrier.

CAPA reports that ANA's proposal would see it taking over Skymark's order for six A380-800s and reconfiguring them into a high-density layout akin to that of its now-retired B747-400(D) fleet. The twindeck jets would then be deployed on domestic flights.

The deal has also received the blessing of Airbus (AIB, Toulouse Blagnac) which, in the wake of Skymark's decision to axe its A380 order, warned it would slap Skymark with nearly USD1billion in cancellation penalties. The European manufacturer had proposed Skymark partner another larger Japanese carrier capable of taking over the order only for Skymark management to reject it on the grounds it would impinge on its independence.

As such, under the terms of the cooperation agreement, Skymark would reportedly retain its own brand identity and operations but would not merge with ANA which, CAPA claims "for various reasons is out of the question."

However, the deal has encountered some obstacles, namely that of Skymark's valuation.

The recent A380-cancellation debacle has seen the carrier's stock plummet in value effectively putting it on the back heal. From ANA's point of view, a decision would also have to be made as to what market sector Skymark would target - budget or full service - and how much independence would be granted to Skymark's managerial team.