Thanks for your comments, guys. It’s been enlightening.

POINT OF VIEW
The story is told through Kannami’s point of view but it really is all about the emotional hell that Kusanagi is going through.

BACKGROUND
“Teacher” (the ace pilot from Lautern), Kurita Jinrou (the lover killed by Suito Kusanagi, the base boss), Yuichi Kannami (the main protagonist who replaces Jinrou) and Hiiragi Isamu (the pilot that replaces Kannami right at the end of the movie) were all kildren clones created from the same personality template.

This is why Fuko (the courtesan who sleeps with Kannami at the beginning) makes reference that Kannami reminds her of Jinrou (who she used to have sex with). Most likely Fuko also used to have sex with Teacher (remember the scene where Kusanagi jealously confronts Teacher in Fuko’s room).

KUSANAGI’S DILEMMA
Teacher used to fly for Rostock but made a deal to join Lautern, on the condition that Lautern would genetically modify him into a normal “adult male” (Kusanagi mentions this in conversation with Kannami).

Here’s the tragedy of it all: Kusanagi fell in love with Teacher and had a child with him, prior to Teacher switching over Lautern. Rostock than replaces Teacher with an exact clone of him named Jinrou.

Thus, the tragedy that unfolds for Kusanagi — she remains madly in love with Teacher but cannot have him. Unable to contain her feelings, she begins a relationship with Jinrou who reminds her exactly of Teacher (Remember the scene where Kusanagi hugs the bunk bed, which was likely the very same bed used by Teacher, Jinrou and Kannami).

The plot seems to suggest that when Jinrou discovers that Kusanagi is actually in love with Teacher and not him (Jinrou just happens to look and talk exactly like Teacher), he is heartbroken and asks Kusanagi to kill him, which she does — and this then sends her into the suicidal mood she is in for most of the movie, as she relives her heartbreak of loving but not having Teacher, and her guilt over killing Jinrou.

Just when Kusanagi thinks things can’t get any worse, along comes Kannami (another Teacher clone), who again triggers all her repressed feelings. The dilemma is that Kusanagi is unable to control her unrequited love for Teacher and continues to love him by proxy via Kannami. Finally, Kusanagi can no longer take the guilt and pressure and asks Kannami to “kill me this time.” But Kannami refuses and instead tells Kusanagi that in order to make things better, one must first choose to live.

When Kannami says “I will kill my father” at the end when he goes after Teacher, he has realised that he is nothing more than a clone of the Teacher template, and is trying to end the vicious cycle of heartbreak for Kusanagi’s sake. Unfortunately, he fails.

At the end of the movie after the credits, Kannami’s replacement arrives (yet another clone of Teacher). But something has changed inside Kusanagi, who seems to have taken onboard what Kannami said and has accepted her fate. Hence, she says “I’ve been expecting you.”

QUESTIONS
The interesting thing is, how many clones of Teacher has Kusanagi killed? How long has this vicious cycle been going on? Was Jinrou the only one? Is Kusanagi a clone herself that has been killed before by a Teacher clone? The real tragedy would be a vicious cycle of Teacher and Kusanagi clones taking turns to kill each other to ease their pain.

Hmm. For me the fact that everyone was expendable was shown earlier, like from that white guy folding his newspaper. And we know the kind of despair that drove Kusanagi and Jinrou to do what they did. And the kind of despair that is tormenting Mitsuya, and that nearly drove Kusanagi to let Kannami do the same thing to her. But even though his death was brutal, didn’t Kannami find his own way of freeing himself from that endless cycle, soaring through the sky instead of crawling under the constant fear of Teacher? And although Kusanagi seems very sad to see that empty sky where no sign of Kannami is showing at the end, doesn’t her smile after the credits say something more about her newly found way of living through this cycle? The slaughter scene may have been too bruta, but as long as we don’t fall in despair and crawl away, challenging the Teacher for the chance of breaking the cycle, even if it’s little, has meaning and who knows, perhaps Kusanagi can find in the next Kannami clone the strength and resolve to take down the Teacher.

@Martin: I’m relieved most anime doesn’t use the two episode an arc method to be honest. It failed awfully when the series aired on the standard episode a week schedule (the pacing being worse hit) and it’s much better when you can watch both back-to-back. Maybe it could work if both episodes were aired very close to another (two eps a week, perhaps) but having that seven day gap really sabotaged a lot of the nuance for me.

@ETERNAL: Approaching it as an ambient of meditative experience seems like the best way to appreciate Sky Crawlers. I agree that’s it’s difficult when something is all atmosphere and no substance, but Sky Crawlers does have some meaning beneath its heavy stylisation. It’s a lot like a book in that new meaning develops as you revisit and revisit. I’d recommend giving it a second chance. :3

That said, I’m sure I’ll rewatch it some day; I’ll just have to wait until I can figure out what it’s about :P

The Sky Crawlers…man, I really want to watch this after hearing so many good things. Oshii movies always benefit from a second viewing in my experience – I can’t devote my attention to the visual prettiness and thematic complexity simultaneously it seems.