Monarch Aircraft Engineering (MAEL) has appointed its managing director Chris Dare as accountable manager for Monarch Aircraft Engineering.
Doubts over the immediate future of Monarch Airlines have subsided after the British carrier confirmed a £165m ($201m) cash injection from majority shareholder Greybull Capital yesterday (October 12).
British airline Monarch has undergone a tumultuous week that saw it first deny rumours of collapse; then negotiate a 12-day extension to its operating licence; and finally announce potentially the biggest investment in its history.
The scheduled and charter carrier – owner of MRO provider Monarch Aircraft Engineering – was rescued in 2014 by private equity firm Greybull Capital, which radically overhauled its business by scrapping long-haul flights in order to focus on the European market.
Despite returning to profit last year and predicting £40m pre-tax earnings for the current financial year, Monarch’s operating licence was only extended by the CAA over the weekend after Greybull promised extra funding.
In the past week, speculation has arisen that low-cost carrier easyJet is considering a bid for fellow UK airline Monarch Airlines, following on from reports that Monarch’s owners Greybull Capital has drawn up its own list of potential acquisition targets including airberlin, TuiFly, Thomas Cook Airlines and an unnamed Spanish LCC.
While mere speculation at this stage, The Sunday Times story has reignited the discussion about the potential emergence of acquisition-driven consolidation in Europe, mirroring the trend that has dominated the US market over the past four years. While consolidation in Europe has been long anticipated in various forms, it has been slower to take off compared to the other side of the Atlantic, with the most recent instances being IAG’s acquisitions of Spanish LCC Vueling in 2013 and Ireland’s Aer Lingus last year.
But should a long overdue consolidation of some of Europe’s carriers occur, many predict this will most likely happen in the fragmented LCC segment, an area viewed as ripe for new alliances. While the likes of easyJet and Ryanair have defied the region’s challenging operating environment and become highly profitable, this hasn’t been the case for many of Europe’s other LCCs.
Low-cost carrier (LCC) easyJet is reportedly considering a bid for fellow UK-airline Monarch whose owners Greybull Capital are reviewing “both inbound and outbound opportunities” for the group.
Monarch Airlines confirmed yesterday (June 3) that its losses during the traditionally difficult winter months reduced by a better than forecasted £40m ($61.4m), with the carrier showing signs that its cost cutting measures are beginning to take effect.
The airline, which last year announced it had slashed £200m ($307m) in annual costs saw its losses lessen to £69.9m ($107.6m) in the six months up to April 30, down from the £110.6m ($170.4m) it posted for the same period last year.
Monarch attributed the smaller loss to its “self-help” turnaround strategy yielding savings of £30m ($46.1m), while it also achieved a £10m ($15.3m) saving on fuel costs, reflecting the current trend of airlines benefiting financially from lower fuel prices. The carrier said its maintenance arm Monarch Aircraft Engineering (MAEL) remained a strong performer, seeing a growth in third-party customers during the past six months, during which time it also opened a new maintenance base in Copenhagen. In light of this, Monarch said it plans to further improve MAEL’s efficiency and ensure its MRO division makes a bigger financial contribution to the group in years to come.
UK-based MRO Monarch Aircraft Engineering (MAEL) has signed a multiyear rate-per-flight-hour (RPFH) contract with AJW Aviation covering components support for Monarch Airlines’ fleet of 34 A320 family aircraft.
Monarch Airlines has finalised its order for 30 737 MAX 8 aircraft, worth more than $3.2bn (£1.9bn).
Private equity firm Greybull Capital has bought 90 per cent of UK travel group Monarch for just £125m ($200m).
The deal signed on Friday (October 24) was agreed after Monarch’s previous owners – the Switzerland-based Mantegazza family – agreed to contribute to a further £50m of capital and staff agreed to pay cuts of up to 30 per cent.
Monarch Airlines was formed by the Mantegazza family in the 1960s as a charter airline, expanding to scheduled operations in 1985, and currently boasts capacity of more than eight million seats. The group also includes MRO Monarch Aircraft Engineering and tour operator Cosmos.
Pilots, cabin crew and MRO staff working for Monarch have voted to accept changes to pay and working conditions as a part of the group’s restructure to become a low-cost airline.