Monarch Airlines cuts losses in first half-year under new ownership

Monarch Airlines Boeing 757-2T7 (24104/170) G-MONJ caught at Manchester International (Ringway) (MAN/EGCC) on November 28, 2008 sporting special "The Captain's Choice Tour" markings.

(Photo by Nik French) 

UK leisure carrier Monarch Airlines reported a loss of £69.9 million ($107.3 million) for the six months ended April 30, improved from a loss of £110.6 million for the same period last year.

The airline said its turnaround was “firmly on track,” with winter losses for the November to April period reduced by a larger than forecast £40 million.

Monarch has now completed the final phase of a restructuring program begun last year, aimed at generating cost savings of £200 million a year. This included network and fleet restructuring, revenue management improvement, and modernizing working practices. Monarch said £30 million of the reduction in winter losses was due to the success of this self-help turn-around program, with the remaining £10 million resulting from additional savings in fuel costs.

CFO Barry Nightingale said, “Our winter performance was better than forecasted with substantially reduced losses. Improved revenue management has played a key part in the turnaround results, but additionally we have put a lot of work into segmenting our customer groups and have been able to take a customer centric approach to reshape our network around increased frequencies to our most popular destinations.

We have also added new scheduled routes taken from our portfolio of destinations previously served as charter routes to provide a better service and increased flexibility to customers.”

Capacity fell 4% year-on-year, with ASKs down 5% to 5.72 billion in H1 2015.  RASKs were down 4% to 4.44 pence for the period, while CASKs improved 12%.

Sold by Switzerland’s Mantegazza family to private investment firm Greybull Capital last October, Monarch has recently celebrated 47 years of flying under the Monarch name. As part of the restructuring plan, the airline has abandoned its traditional charter and long-haul business model and is transforming itself into a scheduled, low-cost predominantly regional carrier.

As part of that strategy, work has now begun on transitioning the airline to a new fleet of Boeing 737 MAX8 aircraft, which will start coming into service in April 2018.  The order for 30 of the new aircraft was confirmed last autumn, and they will replace the current Airbus fleet by 2020, generating further fuel cost savings, the airline said.

In addition to its scheduled airline operations, Monarch’s in-house engineering division—Monarch Aircraft Engineering—reported growth in its third party business, and has opened a new maintenance base in Copenhagen.  Monarch’s tour operating business also reported strong year-on-year growth in on-line bookings, which it said offset some category weakness in high street sales.

(Anne Paylor - ATWOnline News)