How Monarch lost its crown

Brexit, terrorism and a cut-throat market are blamed for the airline’s collapse

A grounded Monarch aeroplane at Luton Airport this morning
(Image credit: DANIEL LEAL-OLIVAS/AFP/Getty Images)

The UK’s fifth-biggest airline went into administration on Monday as a “perfect storm” of terrorist attacks, travel warnings and the fall in sterling left Monarch Airlines unable to compete in the aggressive tour operator market.

Chief executive Andrew Swaffield said the “root cause” of the airline’s decline was a combination of terrorist attacks in Egypt and Tunisia, and the “decimation” of Turkey following last year’s attempted coup.

The volatility deprived Monarch of a “large chunk” of its annual revenues, says the BBC, and forced it to compete instead on congested routes to Spain and Greece.

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The switch led to a “price war in the Med”, in the words of Transport Secretary Chris Grayling. Despite a gradual shift from chartered to scheduled flights, Monarch, which employed around 2,100 people, was no match for the “Big Two” tour operators, Tui Travel and Thomas Cook Group, and its focus on customer service and comfortable journeys failed to beat the lure of flights for a tenner.

Unite, the union representing Monarch’s engineers and cabin crew, said potential investors and buyers were spooked by Brexit uncertainty, and accused the UK of “sitting on its hands” while Monarch went bust rather than offering a loan like the one Air Berlin received from the German government, The Guardian says.

Meanwhile, the drop in sterling after the Brexit vote left Monarch paying £50m a year more for fuel and aircraft.

Monarch’s demise gives its rivals breathing space - for now. Shares in Ryanair, International Airlines Group and easyJet rose sharply in early trading on Monday, and the Daily Star reports that Ryanair was eyeing Monarch’s pilots to fill its own depleted rosters.

However, the reprieve may only be temporary. Air Berlin and Alitalia both filed for insolvency this summer after struggling to compete in the fractured, cut-throat European market.

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