The future of UK independent carrier Monarch Airlines appears to have been safeguarded by the biggest investment in its 48 year history from its majority shareholder, Greybull Capital. The £165 million investment has enabled the business to successfully renew its ATOL licences with the UK Civil Aviation Authority (CAA) for the next 12 months and funded its future growth plans.
The confirmation of the funding ends a couple of weeks speculation over the future of the operator after social media reports started appearing late last month highlighting that a fleet of chartered aircraft were being positioned across to Europe apparently by the CAA to safeguard passengers in the event of Monarch’s collapse.
The airline’s need for additional capital wasn’t unknown and the carrier had stated publicly in the summer that it needed additional short-term financing to continue its turnaround to profitability, but market conditions in the post-Brexit environment had made it harder to seek this capital.
Having required a short-term extension on its ATOL licence renewal last year, the CAA were obviously not willing to take any chances and sufficiently concerned over the future of the airline. However, after a night of discussions on September 25/26 and with a number of aircraft already positioned across to Europe, its worst fears were everted with a guarantee of a “significant investment to come”.
After the CAA extended the deadlines of its ATOL renewal to this week, Monarch has now confirmed it has overcome what was certainly a troubling period for the airline. “It is testament to the extensive effort by all parties, over the past weeks and months, that we are able to announce the largest investment in our 48-year history, as well as the renewal of our ATOL licences. We are now firmly focused on the future as a stronger Monarch,” said Andrew Swaffield, chief executive officer, The Monarch Group.
The investment will see Monarch continue with its previous plans to rollover of its fleet from the Airbus A320 to the Boeing 737 MAX in the coming years, although the terms of the deal with the US manufacturer are understood to have been revised to support the airline’s cash flow. It will start to receive the 30 Boeing 737 MAX-8 aircraft, with options for a further 15 aircraft in order in October 2014 from 2018.
The rumours of Monarch’s troubles had unsettled a number of delegates at the World Routes air service development forum in Chengdu, China. While the airline’s main network points like London Gatwick, Birmingham, Manchester and London Luton in the UK and locations across the Mediterranean were concerned over backfilling a potential capacity void, others raised concerns their own growth plans could be diluted should airlines seek to redeploy resources into these gaps.
But, what actually are the airline’s main markets? The chart that follows highlights the largest departure markets in the airline’s network based on flight schedules for the past week and was extracted from OAG Schedules Analyser.
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