\\\DC - 037171/000001 - 3214789 v1 

BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Application of 

SKYMARK AIRLINES INC. 

for renewal and amendment of an exemption 

pursuant to 49 U.S.C. § 40109 and for a foreign 

air carrier permit pursuant to 49 U.S.C. § 41301 

(Japan-United States Charters) 

)

)

)

)

)

)

)

)

Docket DOT-OST-2010-0096 

APPLICATION OF SKYMARK AIRLINES INC. 

FOR RENEWAL AND AMENDMENT OF AN EXEMPTION AND 

FOR A FOREIGN AIR CARRIER PERMIT

Communications with respect to this document should be addressed to: 

George U. Carneal 

HOGAN LOVELLS US LLP 

Columbia Square 

555 Thirteenth Street, NW 

Washington, D.C. 20004 

Telephone: +1 202 637 6546 

Facsimile: +1 202 637 5910 

E-mail: george.carneal@hoganlovells.com 

Counsel for 

SKYMARK AIRLINES INC. 

April 20, 2011 

NOTICE: Any person may support or oppose this application by filing an answer 

and serving a copy of that answer on counsel for Skymark Airlines Inc. 

and all persons served with this application. Answers to the exemption 

request are due May 5, 2011, and answers to the permit request are due 

May 11, 2011. 
\\\DC - 037171/000001 - 3214789 v1 

BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Application of 

SKYMARK AIRLINES INC. 

for renewal and amendment of an exemption 

pursuant to 49 U.S.C. § 40109 and for a foreign 

air carrier permit pursuant to 49 U.S.C. § 41301 

(Japan-United States Charters) 

)

)

)

)

)

)

)

)

Docket DOT-OST-2010-0096 

April 20, 2011 

APPLICATION OF SKYMARK AIRLINES INC. 

FOR RENEWAL AND AMENDMENT OF AN EXEMPTION AND 

FOR A FOREIGN AIR CARRIER PERMIT

Skymark Airlines Inc. (“Skymark”) hereby applies under 49 U.S.C. §§ 41301, 

41302 and 40109, Subparts B and C of the Department’s Rules of Practice 

(14 C.F.R §§ 302.201 and 302.301, et seq.), Part 211 of the Department’s Economic 

Regulations (14 C.F.R. Part 211), and the Department’s August 23, 2005 Notice in 

Docket DOT-OST-2005-22228 (the “Streamlined Licensing Procedures Notice”) for 

renewal and amendment of its existing exemption authority1/

 and for a foreign air carrier 

permit to authorize Skymark to engage in the following services: 

• charter foreign air transportation of persons, property, and mail between any 

point or points in Japan and any point or points in the United States, and 

between any point or points in the United States and any point or points in a 

 

1/

 In filing this renewal application, Skymark hereby invokes the automatic extension 

provisions of the Administrative Procedure Act, 5 U.S.C. § 558(c), as implemented by 

Part 377 of the Department’s Special Regulations to continue in effect its existing 

exemption authority pending the Department’s final determination on Skymark’s request 

for renewal and amendment of the exemption. This application is timely filed pursuant to 

§ 377.10(c)(3). 
Application of Skymark Airlines Inc. 

Page 2 

\\\DC - 037171/000001 - 3214789 v1 

third country or countries, provided that such service constitutes part of a 

continuous operation, with or without a change of aircraft, that includes 

service to or from Japan for the purpose of carrying local traffic to or from 

Japan; and 

• other charters pursuant to the prior approval requirements set forth in the 

Department’s regulations. 

Skymark’s existing exemption, approved by Notice of Action Taken dated May 20, 2010 

in Docket DOT-OST-2010-0096, authorizes Skymark to conduct Japan-U.S. charter 

flights and other charters pursuant to DOT’s prior approval requirements. This authority 

expires on May 20, 2011. Pursuant to the show-cause procedures described in the 

Streamlined Licensing Procedures Notice, Skymark requests that the Department issue 

a single Order (a) renewing and amending the exemption to authorize the expanded 

charter services specified above for a period of two years, or until the effective date of 

Skymark’s final foreign air carrier permit, whichever occurs first, and (b) tentatively 

awarding a foreign air carrier permit to Skymark. As soon as possible thereafter, 

Skymark requests that the Department release a Final Order issuing Skymark its foreign 

air carrier permit for a period of indefinite duration. 

In support of this application, Skymark submits the following information: 

1. Skymark is a well-established and growing low-cost Japanese airline 

based at Tokyo Haneda Airport, currently operating a fleet of Boeing 737-800 aircraft. 

Skymark conducts primarily scheduled service on domestic Japanese routes, but is 

implementing plans to expand the scope of its service offerings internationally. Last 

year, Skymark obtained initial DOT exemption authority to conduct Japan-U.S. charter 

flights, and subsequently operated its first series of flights between Tokyo and Guam. 
Application of Skymark Airlines Inc. 

Page 3 

\\\DC - 037171/000001 - 3214789 v1 

See Notice of Action Taken dated May 20, 2010 in Docket DOT-OST-2010-0096 and 

Statement of Authorization #2010-417, approved September 13, 2010. Skymark intends 

to operate additional Tokyo-Guam charter flights as opportunities arise, as well as other 

Japan-U.S. charter flights in the future. 

2. Japan and the United States reached a significant milestone with respect 

to open-skies air transportation opportunities last year. By Memorandum of 

Understanding signed October 25, 2010 (the “2010 MOU”) the Governments of Japan 

and the United States agreed to implement open-skies understandings on the basis of 

comity and reciprocity pending formal entry into force of the 1952 Civil Air Transport 

Agreement between Japan and the United States, as amended to reflect a Japan-U.S. 

open-skies relationship. In light of these new opportunities, Skymark seeks renewal and 

amendment of its DOT exemption authority and subsequent issuance of a foreign air 

carrier permit to enable Skymark to engage in charter services to and from the 

United States to the full extent contemplated by the Japan-U.S. open-skies 

understandings. 

3. Skymark continues to be fit, willing, and able to provide the charter 

foreign air transportation authorized by its existing exemption authority and to provide 

the additional charter services described in this application. Both its homeland 

government and the Department have previously found Skymark to be operationally and 

financially qualified to engage in charter foreign air transportation. See Special 

conditions/Remarks of Notice of Action Taken dated May 20, 2010 in Docket DOT-OST2010-0096. Additional fitness information as required under 14 C.F.R. § 211.20 

establishing Skymark’s qualifications for a foreign air carrier permit (and renewed and 

expanded exemption authority in the interim) is as follows: 
Application of Skymark Airlines Inc. 

Page 4 

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(a) The name and address of the applicant, the nature of its organization and the 

country under the laws of which it is organized. 

 Skymark is a publicly traded corporation formed under the laws of Japan 

and in good standing. Its address is: 

Skymark Airlines Inc. 

1-5-5 Haneda Airport 

Ota-ku, Tokyo 144-0041 

Japan 

(b) Name and address of the government air transport authority with regulatory 

jurisdiction over the Applicant. 

 Japan’s Civil Aviation Bureau (“JCAB”), a component of the Ministry of 

Land, Infrastructure and Transport (“MLIT”), exercises regulatory jurisdiction over 

Skymark. JCAB’s address is: 

Civil Aviation Bureau 

Ministry of Land, Infrastructure, Transport & Tourism 

2-1-3 Kasumigaseki 

Chiyoda-ku, Tokyo 100-8918 

Japan 

(c) Statement of the authority requested and a description of the services proposed. 

 Skymark is seeking renewal of its existing DOT exemption authority, 

amendment of that authority, and issuance of a foreign air carrier permit under 

the Department’s streamlining procedures to authorize Skymark to continue to 

provide charter foreign air transportation of persons, property, and mail between 

any point or points in Japan and any point or points in the United States, and, 

further, to provide such charter air transportation between any point or points in 

the United States and any point or points in a third country or countries, provided 

that such service constitutes part of a continuous operation, with or without a 
Application of Skymark Airlines Inc. 

Page 5 

\\\DC - 037171/000001 - 3214789 v1 

change of aircraft, that includes service to or from Japan for the purpose of 

carrying local traffic to or from Japan. Such authority is entirely consistent with 

the rights available to Japanese air carriers under the 2010 MOU. Skymark also 

continues to seek the flexibility to conduct other charters under its exemption and 

permit authority in accordance with the prior approval requirements set forth in 

the Department’s regulations (14 C.F.R. Part 212). 

 Pursuant to its exemption and permit authority, in the near term, Skymark 

plans to continue to operate occasional charter flights within the range limitations 

of its Boeing 737-800 fleet, primarily offering low-cost leisure service between 

Japan and the Territory of Guam and possibly other U.S. destinations such as 

the Commonwealth of the Northern Mariana Islands, as market circumstances 

permit. In the longer term, Skymark foresees operating charter services to other 

U.S. points, including mainland U.S. locations, based on its strategic fleet 

expansion plans. As addressed in greater detail in this application, Skymark 

recently placed an order for four (4) Airbus A380 aircraft with anticipated 

deliveries commencing in 2014. Skymark envisions that the addition of these 

aircraft to its fleet will dramatically expand its Japan-U.S. charter opportunities. 

(d) Information concerning the directors, officers and key management personnel of 

Skymark. 

The directors, officers, and key management personnel of Skymark are 

listed below. To the best of Skymark’s knowledge and belief, none if the listed 

personnel are related by blood or marriage. Each individual is a resident of 

Japan, and the business address of each is care of Skymark’s headquarters in 

Tokyo. 
Application of Skymark Airlines Inc. 

Page 6 

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Title Name/Address Citizenship 

Chairman of the Board 

Vice President, Flight Operation Division 

Mr. Takashi Ide 

Tokyo, Japan 

Japanese 

President/Chief Executive Officer Mr. Shinichi Nishikubo 

Tokyo, Japan 

Japanese 

Executive Director 

Chief Financial Officer 

Mr. Masakazu Arimori 

Tokyo, Japan 

Japanese 

Director 

Vice President, Engineering & Maintenance Division 

Mr. Kimiyoshi Sakaki 

Tokyo, Japan 

Japanese 

Vice President, Airport Operations Division Mr. Shozo Kato 

Saitama, Japan 

Japanese 

Vice President, General Affairs & Personnel Division Mr. Narutoshi Terada 

Tokyo, Japan 

Japanese 

General Manager/Assistant to Vice President, 

Flight Operation Division 

Safety Promotion Council 

Mr. Masuhei Hayashi 

Kanagawa, Japan 

Japanese 

General Manager, Flight Operations Department Mr. Manabu Kaneko 

Kanagawa, Japan 

Japanese 

General Manager, Line Maintenance Department Mr. Yoshinori Takegoshi 

Tokyo, Japan 

Japanese 

General Manager, Finance Group Mr. Toru Noguchi 

Kanagawa, Japan 

Japanese 

General Manager, Flight Crew Department Mr. Teruo Ono 

Kanagawa, Japan 

Japanese 

General Manager, Quality Assurance Department Mr. Shigeki Himeno 

Tokyo, Japan 

Japanese 

Station Manager, Haneda Airport Branch Mr. Itaru Ito 

Saitama, Japan 

Japanese 

(e) Information concerning the ownership of the Applicant.

 Skymark is substantially owned and effectively controlled by citizens of 

Japan. Mr. Shinichi Nishikubo, who is Skymark’s President/CEO and a 

Japanese citizen, owns 48.26% of the company’s shares. H.I.S. Co., Ltd. 

(“H.I.S.”), a Japanese travel company listed on the Tokyo Stock Exchange, owns 

9.96% of the company’s shares.2/

 Of the remaining shares, 8.5% are publicly 

 

2/

 According to the most recent Quarterly Journal released to the public, the following 

persons hold 5% or more of the capital stock or capital of H.I.S.: (a) Mr. Hideo Swada (a 

Japanese citizen), 28%; (b) CB New York Orbis SICAV, 9.8%; and (c) H.I.S.-owned 

stock/capital, 5.3%. 
Application of Skymark Airlines Inc. 

Page 7 

\\\DC - 037171/000001 - 3214789 v1 

traded (floating stock) on the Tokyo Stock Exchange. These holdings are diffuse 

and subject to change. No other person owns 5% or more of the capital stock or 

capital of Skymark. 

(f) Other ownership interests. 

 To the best of Skymark’s knowledge and belief, no officer, director, 

manager, or holder of five percent or more of Skymark’s capital stock holds any 

other interest directly or indirectly in any U.S. carrier, foreign carrier, persons 

engaged in the business of aeronautics, or common carrier, or any person whose 

principal business is the holding of stock in, or control of, any air carrier. 

(g) Relationship between the Applicant and its homeland government. 

 Aside from the regulatory oversight of various governmental entities of 

Japan over Skymark, the Japanese government is not involved in the ownership, 

management or operations of Skymark. 

(h) Evidence that the Applicant’s insurance coverage meets or exceeds the liability 

limits of 14 C.F.R. Part 205. 

 Skymark’s insurer, Sompo Japan Insurance Inc., has filed a Certificate of 

Insurance (OST Form 6411) with the FAA verifying that Skymark’s insurance 

coverage meets or exceeds the liability limits of 14 C.F.R Part 205. A copy of the 

most recent submission is enclosed as Exhibit A. 
Application of Skymark Airlines Inc. 

Page 8 

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(i) Evidence of the Applicant’s homeland operating authority.

 Enclosed as Exhibit B is Skymark’s Air Operator Certificate authorizing 

Skymark to engage in commercial air transportation operations, including 

international air transport service to the United States. The AOC remains in 

effect until superseded by a new AOC. Skymark will continue to obtain 

appropriate amendments to its AOC as necessary. 

(j) Operating history of the Applicant.

 Skymark was founded on November 12, 1996, and commenced service 

within Japan in September 1998. The airline is based at Tokyo’s Haneda Airport, 

its main hub, and has established a sizeable domestic network at Kobe Airport as 

well. Since its founding, Skymark has concentrated on providing scheduled 

passenger service on key domestic Japanese routes in response to the traveling 

public’s demand for quality low-cost air transportation alternatives to the services 

offered by Japan’s entrenched legacy airlines. Today, Skymark operates a fleet 

of eighteen (18) Boeing 737-800 aircraft, serving thirteen (13) cities in Japan, 

with a workforce of more the 1,600 employees. 

 In response to recent economic developments and ongoing changes to 

the aviation marketplace in Japan and worldwide, Skymark is pursuing a growth 

strategy that includes expansion in international markets. Notably, a fourth 

runway and new international terminal have opened at Haneda Airport, paving 

the way for more low-cost competition and international access to Skymark’s 

main base at this key Tokyo gateway airport. To remain robustly competitive and 

viable, Skymark is taking several steps to strengthen and expand its brand and 

low-cost services, including the recent execution of a firm order for four A380 
Application of Skymark Airlines Inc. 

Page 9 

\\\DC - 037171/000001 - 3214789 v1 

superjumbo jetliners (with the option to acquire two more), which will enable 

Skymark to provide long-haul international services. As an additional component 

of its expansion strategy, Skymark is seeking long term DOT authorization to 

maximize Japan-U.S. service opportunities. 

(k) List of the aircraft owned, leased and operated by the Applicant.

Skymark’s current fleet consists of eighteen (18) leased Boeing 737-800 

airplanes, all registered in Japan, as follows: 

Reg. # Lessor 

JA737H Genesis Funding Norway 1 AS, Stranden 1, PB 1524 Vika, N-0117, Oslo, 

Norway 

JA737K Gate Leasing (Norway) AS, Nydalsveien 33, 0484, Oslo, Norway 

JA737L GECAS Aircraft Leasing Norway AS, Stranden 1, 0250 Oslo Vika, 0117 

Oslo, Norway 

JA737M GECAS Aircraft Leasing Norway AS, Stranden 1, 0250 Oslo Vika, 0117 

Oslo, Norway 

JA737N Wells Fargo Bank Northwest, NA, 299 South Main Street, Salt Lake City, 

UT 84111 

JA737P Wells Fargo Bank Northwest, NA, 299 South Main Street, Salt Lake City, 

UT 84111 

JA737Q Genesis Funding Norway 1 AS, Stranden 1, PB 1524 Vika, N-0117, Oslo, 

Norway 

JA737R Avolon Aerospace Norway 1 AS, Nydalsveien 33, c/o TMF Norway AS, 

0484, Oslo, Norway 

JA737T Macquarie Aerospace Inc., Suite 200, Two Embarcadero Center, San 

Francisco, CA 94111 

JA737U NBB Black Swan Co., Ltd., 3-3-2 Nihonbashihamacho, Chuo-ku, Tokyo, 

Japan 

JA737X BOC Aviation (USA) Corporation, 5606 Riggins Court, Suite 249, Reno, NV 

89502 

JA737Y NBB Blue Jay Co., Ltd., 3-3-2 Nihonbashihamacho, Chuo-ku, Tokyo, 

Japan 

JA737Z SKK Corporation, 1-3 Yokohama-nishimachi, Kochi-shi, Japan 

JA73NA Bank of Utah, 200 E. South Temple, Suite 210, Salt Lake City, Utah 84111 

JA73NB Bank of Utah, 200 E. South Temple, Suite 210, Salt Lake City, Utah 84111 
Application of Skymark Airlines Inc. 

Page 10 

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Reg. # Lessor 

JA73NC NBB Hummingbird Co., Ltd., 3-3-2 Nihonbashi Hamacho, Chuo-ku, Tokyo 

103-0007, Japan 

JA73ND NBB Ostrich Co., Ltd., 3-3-2 Nihonbashi Hamacho, Chuo-ku, Tokyo 

103-0007, Japan 

JA73NE Mitsubishi UFJ Lease & Finance Company Limited, 5-1, Marunouchi 1-

Chome, Chiyoda-ku, Tokyo, Japan 

 Skymark expects four (4) additional Boeing 737-800 aircraft to be 

delivered in 2011, and five (5) more to be delivered in 2012. In addition, on 

February 17, 2011, Skymark signed a contract to acquire four (4) A380s, with an 

option for two (2) additional aircraft. Skymark is the first Japanese air carrier that 

proposes to operate A380 superjumbo jetliner service. Delivery of the first A380 

is expected in 2014. 

 Skymark does not have any plans to wet-lease its aircraft. 

(l) Aircraft maintenance information. 

Routine maintenance (A-Checks and similar) on Skymark’s Boeing fleet is 

performed directly by Skymark at its Haneda Airport base. Heavy maintenance 

(C-Checks and above) are outsourced to major third-party organizations, 

including Delta, Lufthansa Technik, Honeywell, and Evergreen Aviation 

Technologies (a joint venture between General Electric and EVA Air). Skymark 

expects to enter into additional maintenance contracts pertaining to its A380 

aircraft in the future. Skymark’s maintenance program complies with ICAO pilots 

and airmen annexes 1, 6 (Part 1) and 7. Japan is a contracting state of the 

Convention on International Civil Aviation. 
Application of Skymark Airlines Inc. 

Page 11 

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(m) Description of any agreements or cooperative working arrangements.

 There are no existing or planned cooperative working arrangements 

between Skymark and other air carriers that would affect Skymark’s proposed 

services to the United States. 

(n) Financial data summaries.

 Exhibit C contains Skymark’s non-consolidated financial statements for 

the two most recent years available (fiscal years ended March 31, 2008 and 

2009), and through the most recent available fiscal quarter (third quarter ended 

December 31, 2010), stated in U.S. dollars. Exhibit C includes a Verification by 

Mr. Masakazu Arimori, Skymark’s Executive Director and Chief Financial Officer, 

confirming that these financial data summaries are complete and accurate. 

(o) Financial assistance received or expected from the Applicant’s homeland 

government, if any.

 Skymark has not received, nor does it expect to receive, financial 

assistance from the Japanese government. 

(p) An estimate showing the total traffic and the financial results of the proposed 

services for the first full year of normal operations.

 During its initial year of normal operations, Skymark anticipates that its 

services will continue to be limited to Tokyo-Guam charter flights that would be 

offered in Japan as part of direct-sale and travel agency-sale inclusive tour 

charter programs. Skymark projects that it will conduct approximately thirteen 

(13) roundtrip flights using Boeing 737-800 aircraft, each configured with 177 
Application of Skymark Airlines Inc. 

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seats (all in economy class). Based on a nearly 97% average load factor with 

respect to its previous Tokyo-Guam charter program, Skymark estimates that it 

would carry approximately 2,236 passengers to/from Guam, generating gross 

revenues of approximately $376,000 and an operating profit of approximately 

$204,000. 

(q) Issues relating to the air transport agreement between the United States and 

Japan.

 Issuance of the requested exemption authority and foreign air carrier 

permit is entirely consistent with the U.S.-Japan Civil Air Transport Agreement of 

1952, as amended and implemented by the 2010 MOU (constituting prima facie

evidence that approval of this application is in the public interest) and with the 

state of reciprocity and comity between Japan and the United States. Under the 

2010 MOU, airlines of each party (whether or not they have been formally 

designated) may operate an unlimited number of charter flights between any 

point or points in the United States and any point or points in Japan (and, in 

accordance with Section 2 of the MOU Annex, any point or points in a third 

country or countries), except that, pursuant to Section 3 of the MOU Annex, no 

more than six hundred (600) charter flights may be operated per year by airlines 

of each party to or from Haneda Airport. Skymark’s Tokyo-Guam and other 

charter services would be operated within these limitations. 

 DOT’s approval of other charter flights (e.g., seventh-freedom charter 

flights) would be subject to a determination of adequate reciprocity between the 

United States and Japan (which is the case under the two countries’ current 

open-skies understandings and positive overall aviation relationship) and the 
Application of Skymark Airlines Inc. 

Page 13 

\\\DC - 037171/000001 - 3214789 v1 

standards the Department normally applies to such approvals under 14 C.F.R. 

Part 212. 

(r) The policy of the applicant’s homeland government with respect to U.S. carriers’ 

applications for scheduled and charter authority, including whether the homeland 

government grants fifth-freedom traffic rights to U.S. carriers.

 It is Skymark’s understanding that MLIT has been honoring U.S. air 

carrier requests for scheduled and charter authority in accordance with the terms 

of the 2010 MOU, including those requests involving fifth-freedom traffic rights 

that are consistent with the agreement. Like the Department, MLIT has also 

been addressing Haneda charter flight requests subject to the limits of Section 3 

of the 2010 MOU Annex. See DOT Notice, “Japan Charter Authorizations 

(January 1 – December 31, 2011),” served December 23, 2010 (Undocketed). 

 With respect to seventh-freedom charter flights, reciprocity on the part of 

Japan has previously been demonstrated by MLIT’s approval of U.S. carrier 

charter flights between third countries and points in Japan. See, e.g., 

MLIT/JCAB reciprocity statements dated July 14, 2010 and March 3, 2011, filed 

in Docket DOT-OST-2006-24269. 

(s) Statement as to whether the Applicant has, for the preceding 5 years, been 

involved in any safety or tariff violations or any fatal accidents. 

 For the preceding five years, Skymark has not been involved in any fatal 

accidents or any tariff or safety violations except for four (4) warnings issued by 

JCAB relating to maintenance or flight operations matters. 
Application of Skymark Airlines Inc. 

Page 14 

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(t) Submission of OST Form 4523 (Waiver of liability limits under the Warsaw 

Convention).

 Signed OST Form 4523 has been submitted to Docket 

DOT-OST-1995-236 (see Document ID DOT-OST-1995-236-0526). See also 

Exhibit SKY-4 of Skymark’s exemption application dated April 14, 2010 in Docket 

DOT-OST-2010-0096. 

OTHER REQUIREMENTS

4. In accordance with the requirements of 49 U.S.C. § 41313(c), Skymark 

has previously submitted to the Department (in Docket DOT-OST-1998-3304) and the 

National Transportation Safety Board a plan to address the needs of families of 

passengers involved in aircraft accidents. See Document ID DOT-OST-1998-3304-

0949. 

5. Similarly, in accordance with the requirements of 14 C.F.R. § 243.13, 

Skymark has previously filed a brief statement with the Department (in Docket 

DOT-OST-1998-3305) summarizing how it will collect the passenger manifest 

information required by Part 243 and transmit the information to the Department of State 

in the event of an aviation disaster. See Document ID DOT-OST-1998-3305-0593. 

6. In light of the limited scope of its proposed charter operations in the 

immediate future, the introduction of the charter services contemplated by Skymark will 

not involve a near-term net annual change in aircraft fuel consumption exceeding 

10 million gallons, meaning approval of this application would not constitute a “major 

regulatory action” under the Energy Policy and Conservation Act, as implemented by 

14 C.F.R. Part 313. Skymark does not anticipate encountering any difficulty in obtaining 

adequate supplies of fuel for its proposed services from existing sources. 

Application of Skymark Airlines Inc. 

\\\DC - 037171/000001 - 3214789 v1 

EXHIBIT LIST

Exhibit 

A Foreign Air Carriers Certificate of Insurance 

B Air Operator Certificate (AOC) 

C Non-Consolidated Financial Statements 

D Verification 
Application of Skymark Airlines Inc. 

\\\DC - 037171/000001 - 3214789 v1 

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Foreign Air Carriers Certificate of Insurance
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_ This policy cove|s CARGO op€ralions orlyard excl.rdos pass€nger liabality insurance.

' NOTE: lr the aircra“ covere0 0y● Is poicy have more than 30 passenger seals or more than a maxlmum payload capacity of

7.500 pOunds the minimum init per occurence shal be S20 000 000
OMB No

A. FOREIGN AIR CARRIERS OPERATING SMALL AIRCRAFT

The airctaff covered by this policf are SMALL AIRCMFT (i.a, with 60 or fewer passenger seats or with a maximum

payfoad capadty ol 18,0OO pounds or less). (Check sepaftG or conbinad covenga as awroptiate):

_ Separate Coverages:

Policy No. Type of Liability Each Percon Each Occuffence

Comb ned Bodly lnlury(Exc uding Passenge、 other

than cargo a“ endanls)anO Propeny Danage Liablty $300,ooO S2.000.000'(See note)

Passenger Bodly inlury Liablty $30o,ooO S300,000x75%of lotal

number of passenger seals

installsd in lhe aircraft

- 

Combined Cov€rag€: This combined coverage is a single limil of liabillly for each occunence al l6ast eqmt to lh€ €-

quked minimums stated above for bodily injury (exctudang passenger), prcpsrty damage, and passenger bodily iniury.

and exdudes Dassenqer liabilitv insurcnce.

C FORE:GN AIR CARRlERS OPERATlNG LAROE A!RCRAFT

The aircrafl coverod by lhis policy are LARGE AIRCMFT (i. e., with more than 60 passengor seats or with a meximum

payload capacity of more than 1 8.000 pounds). lcheck sgpa.ste or conbined coverage as aDrcpiate)l

_ Sepaft e Cove€gesl

εacll Persoη Eac力 Occυ′′θ

"ce Conbined Bodiy inlury(Exc ud ng Passengers other

than cargO attendants)and PrOpe,Damage Liablにy s300 000 S20,0001110・ (see nCte)

Passenger Bodiy lIII ury Lia01ly s300,000 S300000x75%of total

numb8「 or passon9o「 seats

instaled in the alreralt

Combined Coverage: This combaned cov6rage is a singt€ timil of tiabitity irr each occunence at leasl equat to the rc_

quhed minimums staled above for bodily injury (exctuding passengers), properiy damage, and passenger bodity injury.

AnO卵 ′OF Covettge_Notに ss man S750gp。。。

. The policy or policles lisled in this c6nmcat6 insur6(s) (Check One):

L Operations conducted wilh att aircrafl operated by the Insured

Operalions conducted with lhe foltowing types of aircraff:

wilh lhe following aircrafr: (Use addilionat paqe if

FAA orF●oon nag

Mよe andヽ 螂 el Reoおhtt N●

|

. Each policy listed in this cerlificate meets or exceeds the requirements in 14 CFR part 205.

2●1,NishlShintuku l ChOme

Tokvo,」 apan.16● 3338

Takashilkeucha. Manaoer Aviafon &

{Conbct peNn who @n Erily the ef,ectiv.ness ol the @wase)

+81 333

(Nane ol arckeL it apphcabte)

“

綸acme,PI。 ′′θ′v切"be/1  ́rea code FAX′ vυmoerl
Application of Skymark Airlines Inc. 

\\\DC - 037171/000001 - 3214789 v1 

Exhibit B

Air Operator Certificate (AOC)


Application of Skymark Airlines Inc. 

\\\DC - 037171/000001 - 3214789 v1 

Exhibit C

Non-Consolidated Financial Statements

Non-consolidated Balance Sheet

($1K)

Interim(3Q)

As of 2009/3/31 2010/3/31 2010/12/31

Assets

Current assets

Cash and deposits 34,082 80,687 176,027

Accounts receivable - trade 24,949 25,422 32,947

 Marketable Securities - - -

Aircraft components 3,388 901 888

Accounts receivable - other 5,246 3,275 184

Consumption tax receivable 904 - 5,654

Prepaid expenses 10,695 11,644 19,659

Other 182 204 231

Allowance for doubtful accounts △ 248 △ 254 △ 49

Total current assets 79,198 121,879 235,542

Fixed assets

Tangible fixed assets

 Aircraft parts 17,001 10,032 10,515

Buildings 2,989 2,371 4,841

Machinery and Equipment - 10,731 9,544

Vehicles 2,692 1,319 9,033

Tools, furniture and fixtures 3,900 3,468 4,607

Lease assets 5,241 6,837 10,368

Construction in progress 11,915 2,013 26,269

Other -- -

Total property, plant and equipment 43,738 36,771 75,175

Total intangible assets 279 224 224

Investments and other assets

Caution and guarantee money 20,529 21,293 27,693

Long-term deposits 53,600 39,639 56,949

Other 55 41 47

Allowance for doubtful accounts △ 101 △ 81 △ 78

Investments in stock of affiliated companies 70 68 26

 Long-term loans receivable 101 81 78

Long-term prepaid expenses 518 331 287

Total investments and other assets 74,773 61,371 85,002

Total fixed assets 118,789 98,365 160,401

Deferred assets

Development expenses 787 - -

Total deferred assets 787 - -

Total assets 198,774 220,244 395,943

Interim(3Q)

As of 2009/3/31 2010/3/31 2010/12/31

Liabilities

Current liabilities

Accounts payable - trade 17,417 15,144 23,646

Accounts payable 4,194 248 3,363

Accrued income taxes 4,113 5,809 8,000

Consumption tax receivable 476 661 53,391

Consumption tax payable, etc. - 2,802 -

Deposits received - 2,431 987

Advances received of operating revenues 13,815 22,494 48,460

 Reserve for bonuses -- -

Reserve for scheduled maintenance costs 4,342 1,564 2,164

Reserve for aircraft return 25,278 - -

Other 2,013 436 754

Total current liabilities 71,648 51,589 140,765

Fixed liabilities

Reserve for scheduled maintenance costs 22,914 35,461 51,431

Reserve for aircraft return 1,396 3,065 8,073

Lease obligations 5,117 6,844 10,461

Other 777 796 2,081

Total fixed liabilities 30,203 46,166 72,047

Total liabilities 101,851 97,754 212,812

Shareholders' equity

Capital stock 53,083 51,400 60,205

Capital surplus

Additional paid-in capital 80,850 42,079 49,503

Other 170 - -

Total capital surplus 81,020 42,079 49,503

Retained earnings

Retained earnings brought forward △ 37,568 28,254 72,583

Total retained earnings △ 37,568 28,254 72,583

Treasury Stock △ 1,011 △ 978 △ 1,124

Total Share holders' equity 95,523 120,754 181,167

Share Warrant 1,399 1,736 1,964

Total net assets 96,923 122,490 183,131

Total liabilities and shareholders' equity 198,774 220,244 395,943
Non-consolidated Statements of Income

($1K)

Interim(3Q)

Fiscal year ending 2009/3 2010/3 2010/4-12

Operating revenues

Passenger revenue 462,403 442,301 501,834

Cargo revenue 901 43 -

Incidental and other revenues 6,882 3,445 6,537

Total Operating Revenues 470,186 445,789 508,371

Operating expenses

Operating expenses 469,021 386,045 376,755

Incidental and other expenses 156 176

Total Operating Expenses 469,177 386,221 376,755

Gross operating income (△loss) 1,009 59,568 131,616

Selling, general and administrative expenses

Sales commission 6,721 6,568 5,856

Advertising expenses 3,789 1,140 1,066

Salary and related expenses 6,047 6,983 5,942

Welfare expenses 1,073 1,195 158

Commission fees 4,329 4,623 4,962

Other 2,433 2,214 6,460

Total selling, general and administrative expenses 29,268 25,769 24,444

Operating income (△loss) △ 28,259 33,799 107,172

Non-operating income

Interest income 21 17 17

Penalty income 2,371 153 2,080

Other 748 707 494

Total non-operating income 3,139 876 2,591

Non-operating expenses

Interest expenses 157 592 579

Exchange loss 1,158 2,287 8,534

Other 113 5 32

Total non-operating expenses 1,428 2,884 9,146

Ordinary income (△loss) △ 26,547 31,792 100,617

Extraordinary profits

Gain on sales of fixed assets 4,721 485 689

 Reversal of allowance for doubtful accounts - - -

Other 178 98 75

Total extraordinary profits 5,221 583 1,047

Extraordinary loss

Loss on disposal of fixed assets 493 775 261

Inpairment Loss - 1,752 38

Other 585 1,334 104

Total extraordinary loss 1,078 3,862 403

Income before income taxes adjustments (△loss) △ 22,337 28,513 101,260

Corporate and inhabitants taxes, etc. 266 260 52,529

Net income (△loss) △ 22,670 28,254 48,731
Application of Skymark Airlines Inc. 

\\\DC - 037171/000001 - 3214789 v1 

Exhibit D

Verification