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...but also seeMonarch airlines says flights operating as normal
28 minutes ago
Budget airline Monarch says its flights are operating as normal following "negative speculation" about the firm's financial health over the weekend.
Monarch said it was "trading well" despite a difficult period for the industry because of terrorist incidents, Brexit and the weak pound.
The statement added that it expected to announce a significant investment in the coming days.
Investment firm Greybull Capital bought a 90% stake in Monarch in 2014.
Over the weekend Monarch's Twitter feed was full of speculation from customers asking whether the company was going bust.
On Sunday a spokesperson denied those rumours, saying it had no idea where they were coming from.
Monarch said on Monday it expected to make more than £40m in underlying earnings by the end of its financial year in October.
Atol protection
It said in a statement: "Our flights are operating as normal, carrying Monarch passengers as scheduled.
"To weather tougher market conditions and to fund its ongoing growth, Monarch expects to announce a significant investment from its stakeholders in the coming days."
The airline is protected by the Air Traffic Organisers' Licensing (Atol) scheme - a government scheme which refunds customers if a travel firm collapses, and ensures they are not stranded.
Earlier this year Low Cost Holidays collapsed, without Atol protection, leaving 27,000 customers abroad.
Monarch employs around 2,800 staff and is based at Luton airport.
Majority owners, Greybull Capital, also bought a division of Tata Steel this year, as well as 140 M Local convenience stores from Morrisons, which subsequently went into administration.
Mystery over 'shadow airline' apparently created for Monarch passengers
The airline has refuted rumours about its future: “Our flights are operating as normal, carrying Monarch passengers as scheduled”
Simon Calder |
@SimonCalder |
1 hour ago|
2 comments
But many questions remain unanswered about the apparent preparations for an airlift. Schedules posted online, which The Independent has been unable to verify, suggest the Civil Aviation Authority chartered in more than a dozen aircraft for repatriation flight.
Monarch Airlines denies rumours it is about to go bust
The schedules indicate they were intended to carry passengers only in one direction, from Europe back to the UK. That follows the normal pattern when an airline folds.
The Independent estimates that the cost of the operation could reach £10m. It appears that the bill could be met from the Air Travel Trust Fund, which is paid for by a passenger levy.
But several tweets are under scrutiny. At one point the official @Monarch feed asserted: “Our flights are ATOL protected.” While many passengers are covered by the CAA-run scheme, anyone who buys flight-only arrangement direct from the airline is not.
In addition, aviation industry sources have questioned the assertion: “We don't know how these rumours started.”
The Independent has asked for responses from both Monarch and the CAA.
CAA confirmed they chartered the widebodies through ATOL funds I n case Monarch stopped flying this week.
Monarch Airline’s majority shareholder is preparing to offer the short-haul carrier another multi-million pound lifeline after the post-Brexit sterling plunge added further woes to the struggling holiday industry.
The rescue bid is expected to be led by Greybull Capital, which owns a 90pc stake in the airline after agreeing to pump £125m of permanent capital and liquidity facilities into Monarch in 2014.
The Greybull bailout was Monarch’s third in as many years and prompted the Mantegazza family, who started the business with just two aircraft in Luton in 1968, to sell up completely.
Monarch Holdings said earlier this summer it was looking to secure facilities totalling £35m either from owner Greybull Capital or an outside lender, prompting the airline to issue a going concern warning in its annual report.
Budget airline Monarch has received a temporary extension to its licence to sell package holidays.
The company also said it had secured additional funds from shareholders and was close to announcing its biggest ever investment.
The news came just ahead of a midnight deadline for the renewal of its Civil Aviation Authority (CAA) licence.
Last weekend Monarch was forced to deny "negative speculation" about its financial health.
It has struggled under intense competition and a fall in demand for holidays in Turkey and Egypt.
A Monarch spokesman told the BBC that all flights on Saturday were flying as normal.
The company operates 130-140 outbound and inbound flights a day, a
nd passengers had been expressing concern on social media about whether all those flights would take place.
The 12-day reprieve has been welcomed by Brian Strutton,
general secretary of the pilots' union Balpa,
who said the uncertainty had been lifted "which is good news for the pilots, crew, staff and customers".
He added: "Although the Monarch licence has been extended temporarily for 12 days,
my understanding is this will be sufficient to satisfy the regulator that long-term funding is secure and details of this will emerge over the next few days."
But for the licence to be renewed, allowing Monarch to continue to sell package holidays,
the company had to prove it was financially robust.
The company has been majority owned by Greybull Capital since 2014, when the investment firm bought a 90% stake in the airline.
Greybull has now put extra funds into the airline, enabling the CAA to grant a temporary extension to the airline's licence
until 12 October.
By that time Monarch is confident it will have secured the "largest investment in its 48-year history".
In its statement, the CAA said it was able to extend the licence "by requiring the shareholder to provide additional funding and because customers' money will be protected".
"Monarch now has 12 days to satisfy the CAA that the group is able to meet the requirements for a full Atol licence.
"Monarch will remain Atol licensed until this extension expires.
The CAA always advises consumers to ensure they book Atol-protected air holidays and consumers who choose to book an Atol-protected flight or holiday with the company during this time will continue to be protected by the Atol scheme."
A former managing director of Monarch, Tim Jeans, told BBC Breakfast the company had been having difficulties for some time.
"They certainly have to come up with the money and the investment to satisfy the CAA in those 12 days, otherwise the future does look rather bleak.
And the Independent's travel editor Simon Calder told the BBC that Monarch was a "much smaller and less agile" operation than the giants of low-cost aviation, Ryanair and Easyjet.
He added: "The fall in sterling means many of Monarch's costs, the leases on its aircraft, the fuel in its tanks, are much more expensive and there is generally a weakness in demand."
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