Sponsored Listings:
Monarch’s chief executive has apologised for the uncertainty of recent weeks and sought to reassure customers about its long-term future following an eleventh hour, £165 million bailout.
The cash injection by owners Greybull Capital, announced this morning, secures the UK travel giant its Atol licence for another 12 months, without which it would have been forced to stop selling flights and holidays.
The deal will come as a relief to those booked with Monarch – up to one million at any given time – as well as those currently abroad: as many as 100,000. It had been reported that the Civil Aviation Authority had started to position aircraft with a view to repatriating Monarch customers.
But Andrew Swaffield, speaking at the 2016 Abta Convention in Abu Dhabi, insisted that the deal was not a short-term fix and said Monarch was now ready to overcome the hurdles of terrorism and economic uncertainty.
“It’s been the most difficult year of my career – and that includes 9/11, the ash cloud and the financial crisis,” he said. “Terrorism and the vote to leave the EU has created a perfect storm for airlines – it’s not just a Monarch issue.
“Having been bought in 2014, we’re in the early stages of a turnaround. We’re not expected the pound to suddenly bounce back or terrorism to stop – it’s going to be a protracted process. We therefore needed to ensure we have the capital to flourish in this environment and safeguard our future.”
In addition to securing its Atol for another year, the £165 million investment will fund future growth plans that include the delivery of 30 Boeing 737 MAX-8 aircraft, the first of which will arrive in 2018.
“It’s clearly been a difficult couple of weeks and I don’t want to repeat this process,” said Mr Swaffield. “The deal is built around a six-year business plan. By 2021, we will have the youngest fleet of any airline in Europe. The new aircraft are 22 per cent more fuel efficient and we spend £120 million a year on fuel, so that’s a significant saving.
“The uncertainty has had an impact on bookings, mostly for holidays rather than flights, but we hope they will return to normal over the next few weeks.”
He added that Monarch had a clear vision for its brand, which will combine low prices, punctuality and personal service. It wants to position itself closer to airlines like Norwegian, rather than Ryanair, he said, and plans to increase its marketing spend.
“Running an airline in Europe – home to some of the world’s biggest low-cost carriers – is not for the faint of heart. But we’re up for the fight – and you can bet on our future.”
Mr Swaffield also said the airline was eager to return to Sharm el-Sheikh. The latest Foreign Office advice has meant UK travel companies have been unable to fly to the Red Sea resort for around a year.
“In my opinion Sharm is ready to reopen, but it is not my job to decide that,” he said. “It’s an important market – it’s affordable, hot, and not too far away, so it competes with the Canaries for winter sun, but is cheaper. Sharm being out of the market is a big deal for British travellers. There is a big group of people who just don’t want to fly long haul. I’d love to see it reopen, and it is a crying shame to see somewhere suffering as a result of terrorism.”
Mr Swaffield had been due to appear at the Abta Convention on Tuesday, but was forced to cancel due to Monarch’s last-minute negotiations. He flew out today to thank the travel industry for its support.
The company narrowly averted collapse last month, securing a 12-day extension of its Atol just four hours before it was due to expire.
It had until midnight on Wednesday to put its finances in order, but this morning confirmed that the new financing deal was in place.
“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,” said the airline in a statement.
“I’d like to thank the CAA, our shareholders, partners, loyal customers and the team at Monarch for helping us to achieve this successful outcome. We are now firmly focused on the future as a stronger Monarch.”
The deal surpasses the £125 million Greybull pumped into Monarch in 2014, when it bought the airline.
Sourse: telegraph.co.uk
