Monarch Airlines Ceases Trading
The UK’s fifth largest airline, Monarch stopped flying with immediate effect at 0400 on October 2 when administrators from KPMG were appointed for the struggling company.
With immediate effect, all the carrier’s flights to the UK, and for the next two weeks, are being replaced by alternative services organised by the Civil Aviation Authority (CAA) with assistance from the administrators. Under the insolvency proceedings, Monarch Airlines’ Air Operator Certificate has been suspended and is no longer able to fly. As a consequence, all flights operated by Monarch Airlines and future holidays booked through Monarch Travel Group, thought to affect 750,000 people, were cancelled. The majority of the company’s 2,100 staff will also lose their jobs.
A statement issued by the administrators early on October 2, said it wasn’t possible to reschedule either the cancelled flights or holidays and advised passengers not to travel to the airport unless they had made alternative arrangements.
KPMG has appointed Blair Nimmo, Jim Tucker and Mike Pink as joint administrators to Monarch Airlines. Nimmo said: “Mounting cost pressures and increasingly competitive market conditions in the European short-haul market have contributed to the Monarch Group experiencing a sustained period of trading losses. This has resulted in the appointment of us as administrators earlier this morning.” He went added that their primary focus over the next 48 hours is to work with the CAA to provide the infrastructure and information needed to help the government and the regulatory authority ensure the safe repatriation of Monarch customers currently overseas and those due to return to the UK over the next two weeks.
The CAA has been asked by the government to charter more than 30 aircraft to return an estimated 110,000 customers who are currently abroad. Transport Secretary Chris Grayling described the process as the UK’s “biggest ever peacetime repatriation”.
Andrew Haines, CAA Chief Executive, said the decision to stop trading was “very distressing for all of Monarch’s customers and employees”. “We are putting together, at very short notice and for a period of two weeks, what is effectively one of the UK’s largest airlines to manage this task. The scale and challenge of this operation means some disruption is inevitable,” he added.
Monarch had reported a loss of £291m for the year ending October 2016, compared with a profit of £27m for the previous 12 months, after its revenues had slumped. The company was said to have been in last-ditch talks with the CAA last week about renewing its licence to sell package holidays, but it failed to reach a deal.
Meanwhile, Monarch Aircraft Engineering (MAEL) is continuing to operate as a standalone business (see Airliner World, October 2017). It says that whilst Monarch Airlines was a significant customer, its focus is now on servicing its other existing customers and securing new contracts. In the last fortnight MAEL has won a new contract from Virgin Atlantic Airlines, to carry out C1 checks for its Boeing 787-9 fleet between 2017 and 2021 at its Birmingham Airport facility.
Chris Dare, Managing Director for MAEL, commented: “MAEL has always been a standalone business within the Monarch Group, holding its own cash, employees and property. Despite this morning’s sad announcement, MAEL continues to trade as normal.”
A dedicated website and two helplines have been set up for Monarch customer in the UK and overseas: monarch.caa.co.uk, 0300 3030 2800 (UK) and +44 1753 330330 (Overseas)
