Monarch collapses stranding thousands
Ryanair cancels more flights, and backs down over passenger rights
7 October, 2017
People look at an empty Monarch airline service desk at the Luton Airport.
Monarch Airlines, Britain's fifth biggest, collapsed last Monday leaving tens of thousands holidaymakers stranded on airports across the globe, news wires reported. The airline was placed in administration during the night when it had no planes in the air. Passengers were then sent text messages informing them flights had been cancelled, but some were already at airports. With the collapse of the carrier about 860,000 people have lost their bookings, while more than 30 planes were to be sent by the British Civil Aviation Authority (CAA) to return 110,000 holidaymakers who are abroad.
Monarch reported a loss of £291m for the year to October 2016, compared with a profit of £27m for the previous 12 months. Terror attacks in Tunisia and Egypt, increased competition, and the weak pound have been blamed for its demise. The airline had been in last-ditch talks with the CAA about renewing its licence to sell package holidays, but failed to reach a deal. Blair Nimmo, from KPMG, said its collapse was a result of “depressed prices” in the short-haul travel market, alongside increased fuel costs and handling charges as a result of a weak pound.
According to Transport Secretary Chris Grayling, Monarch was a victim of a “price war in the Med.” However, Monarch CEO Andrew Swaffield claimed that the main cause was terrorism in Egypt and Tunisia, as well as the collapse of the market in Turkey. He said it had been carrying 14% more passengers than last year, but for £100m less revenue. Monarch's owner, Greybull Capital, had been trying to sell part or all of its short-haul operation so it could focus on more profitable long-haul routes, and expressed disappointment it had not been able to turn around its fortunes.
Last year, Monarch carried 6.3m passengers to 40 destinations from several British airports. According to the CAA, the 110,000 holidaymakers currently overseas are in at least 11 countries, including Spain, Portugal, Italy and Greece. Replacement flights are currently scheduled to fly to 33 airports.
Separately, Ryanair, the low-cost Irish airline struggling to deal with staff shortages that prompted the cancellation this month of 2,100 flights, announced it would cut 18,000 more. The latest round will affect about 400,000 passengers flying on 34 routes from 17 November to 18 March, the airline said. Some of the destinations that will be affected most are Hamburg, Thessaloniki, and Trapani, Sicily. The staffing issues also led the company to drop its bid to buy the troubled Italian flag carrier Alitalia.
CEO Michael O'Leary was forced to apologise again to customers and shareholders, after having acknowledged earlier this month that scheduling issues had led to flight cancellations affecting about 315,000 customers. Ryanair has also bowed to regulator demands and spelled out more options on offer to passengers affected by its planned flight disruption. On its site, the carrier acknowledges it is required to offer those on cancelled flights full refunds or comparable tickets on rival carriers.