UK’s Monarch Airlines Ends Operations

 - October 2, 2017, 12:52 PM
A Monarch Airlines Airbus A321 taxis at Birmingham International Airport in the UK. (Photo: Flickr: Creative Commons (BY-SA) by airlines470)

The UK Civil Aviation Authority and the UK government deployed more than 30 airplanes to return 110,000 stranded passengers to the UK following Monarch Airlines’ October 2 bankruptcy and cessation of operations. The government asked the CAA to charter the airplanes, at no cost to the passengers, in an operation that amounted to the virtual establishment of one of the UK’s largest airlines. Monarch ranks as the largest UK airline ever to enter administration, according to the CAA.

The CAA advised all customers booked on Monarch flights due to depart the UK not to go to the airport.

“We know that Monarch's decision to stop trading will be very distressing for all of its customers and employees,” said CAA chief executive Andrew Haines. “This is the biggest UK airline ever to cease trading, so the government has asked the CAA to support Monarch customers currently abroad to get back to the UK at the end of their holiday at no extra cost to them. 

“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 that some disruption is inevitable. We ask customers to bear with us as we work around the clock to bring everyone home.”

Monarch has struggled in recent years to turn a profit in the face of stiff competition from low-fare carriers, particularly in short-haul markets. Most recently, the airline has suffered from cost pressures resulting from a weaker pound following the so-called Brexit vote.  

In October 2014, Monarch Airlines and other parts of UK leisure travel group Monarch Holdings completed a restructuring program and sale of 90 percent of the group to Greybull Capital under which it secured £125 million ($200 million) of permanent capital and liquidity facilities. Immediately after the deal closed, the UK Civil Aviation Authority renewed the group’s operating license.

Only a week after securing new ownership and the much-needed capital infusion, the airline finalized an order for 30 Boeing 737 Max 8s. The order, announced at the 2014 Farnborough International Airshow, included options for another fifteen 737 Max 8s and was to mark the beginning of the carrier’s transition to an all-Boeing single-aisle fleet.

Greybull assumed control of Monarch from the Mantegazza family after the former owners agreed to pay £30 million ($48 million) toward reducing the company’s substantial pension plan deficit. Other concessions came from employees, including an agreement to accept pay reductions of up to 30 percent and 700 “redundancies.”