As if the travel industry did not have enough problems with Ryanair...
Monarch have gone.
I am currently in Crete and up until two years ago Monarch would have been our airline of choice to travel to and from Chania.
Monarch closed down that route to concentrate on long haul and there were rumours about their financial stability at that time but it seemed as though they were over it.
Who would run an airline....maybe O' Leary will be able to hire a few ex Monarch pilots.
What a mess.
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They've been struggling financially for some time, so it's not a huge surprise. Still it must be a time of great worry for those that work there and no small one for those booked holidays with them.
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Their core business was the Eastern Med. As Turkish and Egyptian holiday business completely dried up they tried to compete in other European routes but demand there dwindling and subject to heavy competition.
A victim of terrorism and devaluation/Brexit.
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What a pity. Monarch was our airline of choice to Alicante, never had a moments trouble with them, crew always friendly. Looks like it will have to be sleazy jet.
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i too flew with them earlier this year from LBA, although cannot remember where. For a LCC they were very good. Decent onboard leg room & inflight service, far better than Ryanair, whom I hope never to use again. 90% of my LCC flights are with Jet2 anyway.
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CAA Statement
"The CAA said the situation was "unprecedented", but the 110,000 customers currently overseas would be returned home at no additional cost to them.
Chairwoman Dame Deirdre Hutton said there would inevitably be some disruption as the CAA was having to effectively create one of the UK's largest airlines from scratch, adding: "It is a huge undertaking."
Then why not wind the airline down in a controlled manner using all the resources already pre booked to bring the passengers home. But No, everything impounded and grounded as of 4:00am. - Madness.
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>>Then why not wind the airline down in a controlled manner using all the resources
>> already pre booked to bring the passengers home. But No, everything impounded and grounded as of 4:00am. - Madness.
>>
Does seem mad though I assume that from that time the aircraft would no longer be operating under a licenced carrier and it would be a faff to transfer licences, there is clearly slack in the industry so other carriers are able to step in.
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>> Does seem mad though I assume that from that time the aircraft would no longer
>> be operating under a licenced carrier and it would be a faff to transfer licences,
>> there is clearly slack in the industry so other carriers are able to step in.
Germany has kept Air Berlin going by funding a phased run down but I suspect that UK gov wouldn't do that, if only on grounds of free-market ideology.
Several of today's repatriation flights are using Titan, a UK airline that specialises in ready to roll charters. Dalaman to Leeds is using Turkish Airline Freebird. UK spotters may have few movements to chase down.
CAA site says that 'flight only' with Monarch booked after December 16 were not ATOL protected. Looks as though flight only customers in next two weeks will nonetheless be flown home foc. Any returns due hone after that (and all booked outbounds) will be on their own and will need to rebook and look to insurance or credit card for a refund.
Or join the queue of unsecured creditors.
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I think a lot of ‘spare’ Qatar aircraft were en route to the U.K. last night
There is talk of BA maybe taking over. Ryanair are desperate for pilots but the Monarch fleet is mainly Airbus and pilots would need re rating to fly the Ryanair Boeing fleet. At considerable expense & timescale. And that’s if they wanted to work for Ryanair.
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>> I think a lot of ‘spare’ Qatar aircraft were en route to the U.K. last
>> night
Lot's of Qatar a/c currently 'spare' due Qatar's stand off with it's neighbours.
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>> Germany has kept Air Berlin going by funding a phased run down but I suspect
>> that UK gov wouldn't do that, if only on grounds of free-market ideology.
I know the US does similar. I wonder if it's trading while insolvency type of rule?
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Yes Z I agree with you for once.
We never had a problem with them and until two days ago my inbox was regularly receiving holiday offers from them.
Shame for the staff who are out of job.
I do not think many pilots will go to Ryanair under the terms currently offered and I see on pprune that at least one airline in the far east is offering jobs at double the current wages.
Also see from pprune that several Qatar airways flights are apparently Birmingham bound to repatriate those stranded overseas
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Not good. Thoughts with those that face losing their jobs.
Re continuing operations, many contracts terminate on significant change in financial position and I guess the key suppliers being fuel, will not supply unless the customer is covered by credit insurance.
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At the end of the day its how markets work. The airline marke has too many sellers and not enough buyers. The weakest go to the wall. Goodbye Monarch.
Mind you for reasons unknown there is always someone with more optimism than sense trying a new start up operation.
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>> At the end of the day its how markets work. The airline market has too
>> many sellers and not enough buyers. The weakest go to the wall. Goodbye Monarch.
Unfortunately air travel is far from a perfect market or a level playing field, and hidden subsidies still abound.
There probably wasn't a lot wrong with Monarch's costs. But as you already said, the currency movements hurt it and too much of its revenue came from one region which has seen a severe downturn.
We used them a number of times, no problems at all and a better experience all round than other LCCs.
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>> the key suppliers being fuel, will not supply unless the customer is covered by credit
>> insurance.
Its called ATOL, who now have to arrange and fork out to ship crews and planes from abroad, ship customers back to the uk, while the original booked resources are grounded, booking costs for parking.
You know who will make the most money out of this and screw everyone else to the floor? the administrators, always the first often the only people to get paid. In this case KPMG, who's fees while be huge.
Ironically from a country of financial vultures, The US principal of chapter 11 bankruptcy is a much fairer cleaner and altogether more sensible way of sorting out stuff like this.
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>>You know who will make the most money out of this and screw everyone else to the floor? the administrators, always the first often the only people to get paid. In this case KPMG, who's fees while be huge.
Totally agree.
Huge case recently re Lloyds (HBOS heritage cases) where insolvency practitioners bribed bankers to deliberately pull the plug on companies for the fees - which just goes to show how high the fees were!
One case I am familiar with, a bank charged the guarantors of the company £450,000 in fees when the actual cost to the bank was £33,000!!!
Last edited by: zippy on Mon 2 Oct 17 at 10:57
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>>Totally agree. >>
Another bank from north of the Border is also infamous for putting what could/are successful businesses out to grass after providing them with loans.....
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>> You know who will make the most money out of this and screw everyone else
>> to the floor? the administrators, always the first often the only people to get paid.
>> In this case KPMG, who's fees while be huge.
>>
Agreed.
I bought a trampoline in about 2004, the cover was faulty so the company were supposed to send me a new cover worth around 15 quid. They went out of business shortly afterwards since which I have had reports from the administrators every six months or so for the last 13 or so years including annual invites to a creditors meeting.
I wrote to them about five years ago say to stop communicating with me, that it was totally unnecessary and I was not interested, though they completely ignored that.
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>>You know who will make the most money out of this and screw everyone else to the floor? the >>administrators, always the first often the only people to get paid. In this case KPMG, who's fees >>while be huge.
Spot on. Don't understand why ATOL isn't getting the administrators to fly everybody home.
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>> Spot on. Don't understand why ATOL isn't getting the administrators to fly everybody home.
>>
Perhaps because they are not licenced operators.
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>>Perhaps because they are not licenced operators.
Correct.
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>> >>Perhaps because they are not licenced operators.
>>
>> Correct.
But monarch are, they are now controlled by the administrator, ergo they have the legal authority and licenses to ship them home. Stranded passengers are after all technically a company debt or liability.
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Spot on. Don't understand why ATOL isn't getting the administrators to fly everybody home.
Probably because they would expect to book them all on First/Business Class?
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>> Spot on. Don't understand why ATOL isn't getting the administrators to fly everybody home.
>>
From my understanding they aren't allowed to. Why the government doesn't allow it I'm not sure. Other countries seem to allow them to continue in some form or another rather than a shutter being pulled down on the lot.
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From the BBC article...
"In all, the 300,000 cancellations could affect up to 750,000 people, administrators said. "
2 people per flight?
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>> "In all, the 300,000 cancellations could affect up to 750,000 people, administrators said. "
>>
>> 2 people per flight?
Other sources refer to 300,000 bookings. While some are singletons like LL most will presumably be couples or families.
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Ah, obvious now you say it. Sorry, early in the morning, insufficient caffeine so far.
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Very sad about Monarch, first airline I ever flew with, in a BAC 1-11 out of Luton.
The aircraft and crew have always seemed to be amongst the best standards wise and those who have flown with the airline have always seemed very happy.
See that BA are already trying to acquire the fleet, crews and landing slots.
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It is sad because they provided a good service. We had a good holiday in Greece last July and May this year with Monarch. And I was meant to be flying with them again on Wednesday for a week's holiday.
Now have to figure out where else to go. Not going to get where we want (EasyJet would be an option if they had spare seats on the day we should return but they don't). They did yesterday but I was hardly going to book another flight and find I didn't need it. And I waited up until 2am to see if there was an outcome to book flights before the morning.
Oh well. Terrorism and Brexit have played their part in messing up my holiday plans. But I worry more for those losing jobs in the UK and for the businesses across Europe who may not get paid anything for the accommodation they provided Monarch Holidays this season.
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One small bit of good news monarch's engineering arm is expected to continue as a going concern.
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Our Jet2 prices to Alicante early Nov went up £30 overnight, and my trip to Tenerife staying in a nice hotel late Nov just went up £350 ( which rules that out)
I’ll check the Tenerife price again on a weekly basis. Should have booked last night!
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It's a shame, I always thought they were one of the nicer airlines to fly with, and in a different league from a passenger experience perspective to the likes of Ryanair.
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>> It's a shame, I always thought they were one of the nicer airlines to fly
>> with, and in a different league from a passenger experience perspective to the likes of
>> Ryanair.
>>
Unfortunately Ryanair made short haul flying a race to the bottom of customer care. Cheap and unpleasant seems to attract the punters.
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I’ve booked Jet2 > Alicante early November this evening. In the grand scheme of things a £30 increase on the cost of the return flight is acceptable... mind you it’s £150 now, which doesn’t compare favourably with my recent sub £40 return Lpool- Geneva with EasyJet a few weeks ago.
At least the airport car parking, £43 for 10 days, and car hire the other end is cheap enough.
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The flights home for all the stranded passengers will cost £60m, I assume the ATOL scheme is some form of insurance policy?
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>> The flights home for all the stranded passengers will cost £60m, I assume the ATOL
>> scheme is some form of insurance policy?
It would have cost 22 million to keep Monarch flying for a month.
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>>
>> It would have cost 22 million to keep Monarch flying for a month.
>>
In steady state, maybe. But once word was out and no new bookings were forthcoming?
Based on 2106 accounts it spent £498m on cost-of-sale expenses, and £47m on admin. A total of £545m running the airline. Ignore depreciation of £31m as a non cash movement and you require cash of £514m. Not far off £44m a month. Fortunately for 2016, revenue was £559m so all was good - more than £3m a month left over :)
For 2017? Revenue down, and I expect costs are, largely, fixed in the very short term. So now? I bet the cash requirement is still somewhere near £44m a month. Only there are no forward bookings...in fact, worse, the longer it kept going the more cancellations of future bookings...
I can’t see how £22m would touch the sides... that would barely cover the cost of leasing the planes, fuelling and staffing them. For 2016 staff costs are around £6m a month, and lease obligations more than £7m. It’s been 20 years since I worked at BA, but even at today’s fuel price I expect fuel is around 20% of operating costs - another £100m or so, or £9m a month. That’s your £22m. Then there’s maintance, security, landing fees, catering, ground handling, crew accommodation etc etc Add to that the fact that many, or even all, suppliers are going to want cash up front for supplies like fuel and it’s a double whammy
It should have been the easiest solution to keep it flying and engineer a managed retreat, but the reality is they couldn’t control it. Cash in would dry up immediately, or even turn negative. Cash out would get worse as airports, fuel suppliers etc demanded cash up front...
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>> For 2017? Revenue down, and I expect costs are, largely, fixed in the very short term
Costs will have gone up quite a bit because the devaluation of the pound. Fuel is paid for in dollars as will aircraft lease costs. So revenue down and costs up.
Which company will be next.
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>> Which company will be next.
>>
Thomas Cook
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>>
>> >> Which company will be next.
>> >>
>> Thomas Cook
>>
What makes you suggest them CGN?
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>> What makes you suggest them CGN?
They have had a few money issues in the past.
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Aren't they re branding as TUI?
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It is Thomson who are rebranding as TUI I believe.
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Thomson were bought by Tui a Germans company a long while ago but kept the Thomson name for U.K. operations. They are now dropping the name.
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They face the same problems as Monarch. Decline in the package holiday market, destinations like Turkey, Egypt and Morocco shunned by holidaymakers, Huge amount of competition from the likes of Norwegian, EasyJet and Ryanair, Brexit/devaluation of pound, a string of unprofitable high street shops. On top of that their main competitor Tui, has deeper pockets and TC's balance sheet isn't particularly healthy.
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Possibly although I think they are in a bit better position in that they have a bigger long haul network. But time will tell.
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Good analysis Peter, although I suspect fuel is a materially higher proportion of Monarch's cost than it was of BA's - without benefit of any actual facts!
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>> It would have cost 22 million to keep Monarch flying for a month.
PLus all the unpaid bills. Any Monarch aircraft landing overseas is likely to be impounded for unpaid landing fees, fuel etc etc. They may even be impounded on their remote stands at Monarch's UK bases for same reasons.
If the liquidator sells the a/c on to UK operators they'll be re-registered to avoid any lien etc.
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FFS
www.bbc.com/news/business-41501534
Last edited by: No FM2R on Wed 4 Oct 17 at 23:10
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They either have a case or they haven't.
I presume you wouldn't push for every penny owed to you after a breach of contract?
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>> They either have a case or they haven't.
>>
>> I presume you wouldn't push for every penny owed to you after a breach of
>> contract?
That has been the way of things for a while.
My experience is that if a large company owes you money for goods and you go bust they will claim all sorts of potential losses to mitigate what they owe and reduce their liability (often very unfairly) to pence in the pound.
I am working with such a company at the moment. It is on the brink and if it fails its larger customers (household names) will screw it (effectively its creditors) for over £100m. Happens so often that it is inevitable. They will claim they have lost discounts that they would have earned, lost turnover as they couldn't stock the product (they could easily have got it elsewhere) etc. etc. etc. The household names have got their actions in these instances down to a "T" and even have company training documents / plans in place for when it happens.
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>>I presume you wouldn't push for every penny owed
I would certainly push for every penny I was owed. I wouldn't push for every penny I could get.
What other people do is not one of my drivers.
Last edited by: No FM2R on Thu 5 Oct 17 at 01:23
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The company went bust, it ceased to exist overnight, its not planned redundancy, no 45 days consultation was possible, unions have no case.
This however
Staff were sent messages that day inviting them to face-to-face meetings at 09:00 BST or a conference call at 14:00, KPMG said.
KPMG has since faced criticism for Monarch staff being charged by their phone company to join the conference call.
Is completely unacceptable. Its not so much the cost, tho that is a cheek, its the complete absolute shabby insulting disregard exploitation and contempt it shows for the ex employees.
I certainly think there is a social requirement for ex employees to be given first crack at the debt trough with respect to any pension entitlement accrued. It was after all part of the past compensation package previously earned.
Last edited by: Zero on Thu 5 Oct 17 at 09:36
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>> The company went bust, it ceased to exist overnight, its not planned redundancy, no 45
>> days consultation was possible, unions have no case.
While at a certain level that seems obvious the union must have some cause for optimism. As mentioned above there was similar action following the demise of Woolies:
www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Judgments/usdaw-v-woolworths.pdf
On a quick scan it looks as though union claim succeeded at least in part.
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>> FFS
>>
>> www.bbc.com/news/business-41501534
Why not? As Lygonos says employment law was either complied with or it was not. The right place to decide that is either the High Court or an Employment Tribunal. There have been one or two similar claims in other big failures - Woolworths springs to mind. If employer/liquidator are playing fast and loose with rules then they need to be brought to account.
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It beggars belief that KPMG, who do this sort of thing regularly, might have got the process wrong.
I'm not quite sure which magic money tree the unions think the cash will come from though.
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>> It beggars belief that KPMG, who do this sort of thing regularly, might have got
>> the process wrong.
Hmmm...
>> I'm not quite sure which magic money tree the unions think the cash will come
>> from though.
IIRC redundancy payments have some preference when creditors claims are ranked. So the 'magic money tree' is less money for non preferential creditors.
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>>>Hmmmm
No idea what you mean by that.
>>IIRC redundancy payments have some preference when creditors claims are ranked.
to the limit of statutory at its £489.
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Monarch ceases trading - sooty123
