Monarch Airlines Collapse Leaves 110,000 Travelers Stuck Overseas

5 years, 5 months ago - October 02, 2017
Monarch Airlines Collapse Leaves 110,000 Travelers
Monarch Airlines, a struggling British low-cost carrier and tour operator, collapsed into bankruptcy early Monday, ceasing its flights and forcing the government to step in and bring home more than 100,000 passengers stranded abroad.

Britain’s aviation regulator called the collapse of Monarch the “biggest ever U.K. airline failure.” The airline is one of many that have struggled to grapple with Europe’s highly competitive airline market.

Just this year, the Italian carrier Alitalia went into administration, which is similar to bankruptcy protection in the United States, and is currently seeking a buyer. Air Berlin, a German low-cost carrier, filed for insolvency and has put its assets up for sale.

Ryanair, an Irish discount airline, has expressed interest in making a bid for Alitalia’s assets, but it has faced its own public backlash after it was forced to cancel more than 1,000 flights in September and October because of mistakes in its handling of vacation time for pilots. Last week, Ryanair said it would cancel an additional 18,000 flights on 34 routes between November and March to avoid further cancellations.

For Monarch, “mounting cost pressures and increasingly competitive market conditions in the European short-haul market” led to “a sustained period of trading losses,” Blair Nimmo, a partner at the accounting firm KPMG, which is acting as administrator for company, said in a news release.

Monarch’s problems have been building for some time.

Terrorist attacks in Egypt and Tunisia and unrest in Turkey dented demand for tourism to those destinations, weighing on the carrier’s results. That forced the airline to rely more on routes to popular vacation spots in southern Europe, such as Spain, where it faced stiff competition.

Monarch was founded in 1968 and operated flights to 40 destinations from Britain, as well as providing tour packages. It employed about 2,750 people, according to the company’s website.

Greybull Capital, a London-based investment firm, took a controlling stake in the airline in 2014 and was forced to inject capital into the carrier last year.

“We are very sorry that we have not been able to turn around the Monarch Group, and for all the inconvenience and distress that this administration will cause customers, employees and the many people who are associated with Monarch,” a Greybull spokesman said on Monday.

In recent weeks, the airline had been negotiating with the Civil Aviation Authority, a British regulator, over an extension of its Air Travel Organizer’s License, which it needed to continue to sell vacation packages and to operate flights.

Monarch’s abrupt collapse has forced the Civil Aviation Authority to charter aircraft to help about 110,000 travelers stranded abroad return to Britain. A spokesman said that the regulator expected to coordinate about 700 flights over the next two weeks. The first flights arrived early Monday.

In a statement, Chris Grayling, the British transportation secretary, described the effort as “the biggest ever peacetime repatriation.”

“This is an unprecedented response to an unprecedented situation,” Mr. Grayling said.

Text by The New York Times

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