\\\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 authority 1 / 

### 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 app lication, Skymark hereby invo kes the automatic extension

provisions of the Administ rative Procedure Act, 5 U.S.C. § 558(c), as implemented by Part 377 of the Department’s Special Regulations to cont inue in effect its existing exemption authority pending the Department’s final determi nation 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 serv ice 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

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### 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 previous ly found Skymark to be operationally and financially qualified to engage in charter foreign air transportation. See Special conditions/Remarksof 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 it s 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 O fficer 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 Operat ions Division Mr. Shozo Kato Saitama, Japan Japanese Vice President, General Affairs & Pe rsonnel 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 Depar tment 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 Assuranc e 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 Quarterl y Journal released to the public, the following

persons hold 5% or more of t he 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

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### 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 limit s 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 termi nal 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

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### 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. Page 12

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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 pass engers 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 (whet her 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

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### 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 Depar tment (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 st atement 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 char ter 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 

# Exhibit A Foreign Air Carriers Certificate of Insurance

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# _ is an approved 

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# _ Separate Coverages: Minimum Limit



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# No. Type of 

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### y $76.000 S75,000x76%of lolal number of

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### occurenc€ al leasl equal !o lhe required minimums stated above lor bodily injury (excluding pass6ngers), prop€rty damag€, and passenger bodily lnjury. 

### Pollc/m Amount ot Coverage



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### 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 StatementsNon-consolidated Balance Sheet ($1K) I n t er i m (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 equipmen t 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

I n t er i m (3Q) As of 2009/3/31 2010/3/31 2010/12/31 L i a bili t i es Current l iabilities 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 l iabilities 71,648 51,589 140,765 Fixed l iabilities 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 l iabilities 30,203 46,166 72,047 Total l iabilities 101,851 97,754 212,812 Shareholders' equity

C ap i ta l stoc k 5 3 , 083 5 1 , 400 60 , 20 5 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 T reasury S toc k △ 1 , 011 △ 9 7 8 △ 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 198,774 220,244 395,943Non-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 24,44 4 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