TOKYO (AFP) ― Shares in Japan’s Skymark Airlines lost a quarter of their value on Thursday after the struggling carrier filed for bankruptcy protection, citing potentially crippling penalties over a canceled $2.2 billion jet order with Airbus.

The embattled airline’s shares dropped 25 percent to 237 yen ($2) ― their daily loss limit ― as investors reacted to news late Wednesday that Japan’s third-largest carrier would file for bankruptcy, in an acknowledgment that efforts to turn itself around had failed.

“The company came to the conclusion that it will be extremely difficult to rehabilitate itself on its own,” Skymark said in a statement, citing “unreasonable” breach-of-contract penalties.

“If the payments for breach of contract happened, there are concerns that our company’s financial situation could worsen.”

At a press conference in Tokyo on Thursday, company executives bowed and apologized for seeking court protection, a common act of contrition in Japan’s business world.

“I sincerely apologize to our customers, business partners and shareholders for this trouble,” said Skymark’s newly appointed President Masakazu Arimori, adding that daily operations would be unaffected.

His predecessor Shinichi Nishikubo ― who rejected an Airbus call to merge with a larger rival after their dispute was made public in July ― resigned on Wednesday as executives held an emergency board meeting.

The airline will continue operating for the time being, but its shares would be delisted from March 1, according to the Tokyo Stock Exchange.

“We are aware that Skymark Airlines has filed for bankruptcy protection, this is now a matter for the courts,” Airbus said in an email to AFP.

Skymark said it has debts topping $603 million and faces possible compensation costs of as much as $700 million linked to the axed Airbus deal.

It is in talks with Airbus to reduce the size of the penalty, after earlier saying that the European plane maker was preparing a lawsuit over the dispute.

Skymark has struggled because of fierce competition in the airline sector, and its woes deepened after the Airbus affair made headlines last summer.

Its shares lost about half their value in the wake of Airbus canceling the order for six A380 jets, signed in 2011, apparently over concerns it would not get paid.

Skymark, which has about 2,200 employees, was born out of deregulation measures in the 1990s that were aimed at challenging rival All Nippon Airways and Japan Airlines’ control of the market.

It operates domestic flights in and out of Haneda Airport, just a short train ride from central Tokyo.

Japan’s transport ministry “must be considering keeping Skymark so that competition remains in the oligopoly market with two majors,” Hiroshi Hasegawa, an analyst at SMBC Nikko Securities, told Bloomberg News.

JAL received a government bailout after it went bankrupt in 2010. The country’s flagship carrier relisted on the Tokyo bourse in 2012 after an $8.5 billion share sale.