Intrepid Aviation says it has selected Delta Air Lines (DL, Atlanta Hartsfield Jackson) as the sponsor airline candidate for its Creditors’ Rehabilitation Plan for bankrupt Japanese LCC, Skymark Airlines (BC, Tokyo Haneda). The US-based lessor is one of Skymark's largest creditors having filed JPY115 billion (USD928 million) in claims against the airline for its decision to drop seven A330-300 lease contracts earlier this year.

"Intrepid has conducted a thorough process to identify the strongest sponsor candidate to support Skymark’s rehabilitation, and focused on airlines that have a strong presence and operations in Japan combined with long-term commitment to Skymark’s successful rehabilitation," Intrepid said.

For its part, Delta's Managing Director for Japan Masaru Morimoto has said his airline would be able to assist Skymark in overhauling its revenue management systems among other aspects.

"We can assist them in revamping their reservations system (to enable code-shares) and frequent flyer services (Skymark has none), and enhancing the passenger experience. Revenue management is also something we can help," he said.

Intrepid's proposal is competing with a rival one submitted by ANA - All Nippon Airways (NH, Tokyo Haneda) and endorsed by Skymark executives.

Though both bids entail a JPY18 billion (USD145.3 million) recapitalization of the LCC led by Tokyo-based investment fund, Integral Corporation, Intrepid's calls for Delta to invest a maximum of JPY3.6 billion (USD29.05 million) in return for a stake in Skymark which would be capped at 20%. Beyond 20% and Skymark would have to relinquish its thirty-six Tokyo Haneda slot-pairs.

In contrast, All Nippon's proposal would see Integral owning 50.1%, UDS Airlines Investment 33.4%, and ANA Holdings 16.5%.

Skymark's 197 total debt holders, which includes Airbus (AIB, Toulouse Blagnac), will vote for the rehabilitation plan they most prefer either by absentee ballot by July 24, 2015 or at a creditors’ meeting scheduled for August 5, 2015.

Should its proposal be picked, Intrepid says it would voluntarily relinquish claims of JPY30 billion (USD242 million) against Skymark thus freeing up at least JPY1.5 billion (USD12 million) to settle creditors' claims.

According to the ZipanguFlyer blog, talks concerning the possible placement of seven ex-Skymark A330-300s with Delta are in progress. Should those talks prove fruitful, it would further reduce Skymark's debt, thus pushing up the repayment rate as well. Intrepid is offering up to 5.5% while ANA/Skymark is offering 5%.