It has been a horror year for UK low-cost air passengers. Ryanair cancelled 18,000 flights between October and March 2018. Then at 4am on Monday this week, after Monarch flight, ZB3785 from Tel Aviv to Manchester landed at 319am, that airline collapsed into administration. As the UK’s fifth-biggest airline, it is the biggest airline failure in the UK. The collapse left 110,000 people stranded overseas. Monarch dubiously joins an exclusive club of established airlines currently in financial trouble including Alitalia, Air Berlin and Kenya Airways who are all close to bankruptcy.
Monarch had just celebrated its 50th Birthday in June. They have been one of the longest operating airlines in the UK using its original name. “Celebrated” might have been a big word. The airline has been struggling financially since 2009. In that year, British Bookmaker Paddy Power made Monarch Airlines the “Next Airline to go bust?”. They look like they were right.
After a change of ownership, its strategy shifted to being a low-cost short-haul operator. This was its first big mistake. Tiny Monarch was now in a market saturated by low cost carriers (easyjet, FlyBE, Norwegian, Ryan and Wizz etc) but with a fleet of the wromg sort of planes.
Worse, Monarch soon had a reputation for unreliability, flight delays and cancellations. A reviewer on Tripadvisor said: It’s just my personal opinion but I think that people that have had a good Monarch flight are rare and in the minority. Think of yourselves as extremely lucky.
Their arrogance toward customers was reportedly as bad as Ryanair (who I consider to be the most contemptuous of any airline toward customers). A Mr Knight who left a verified review with Skytrax summed their experience up: ” One of the worst flying experiences ever. Seats so tight and packed in like sardines. Couldn’t even get the tray down….Crew are extremely rude and have no time/don’t care. Can see this airline going back into bankruptcy and I will never fly them again.”
Since, September 2016, following another cash injection from its shareholders, Monarch had been stuttering. Airlines are one of the hardest businesses to make money in, let alone survive. Even so, Monarch should have looked at their model a long time ago and revised it back then. They needed to widen their destination mix and be prepared for more worst-case scenarios than they imagined. There is little evidence they really had a long-term plan.
This European summer, the perfect storm hit. The British pound sterling plunged causing all non-pound costs to skyrocket especially fuel costs. The effect of the lower pound led to many of Monarch’s traditional passengers to stay at home rather than face high food and accommodation prices overseas. The effect of political events in Turkey and Egypt further reduced demand. Combined with their so-so service. Monarch only just made it through the summer.
Interestingly, CEO Andrew Swaffield set up a new consulting business for himself just days before the collapse. He clearly saw no way out of things. He stated that he was “absolutely devastated by the collapse.” He said that Monarch “executives had ‘left no stone unturned’ in their effort to save the airline.”
The British government immediately launched the country’s “biggest ever peacetime repatriation” chartering 34 planes including 10 from Qatar Airways to help return stranded passengers. The cost of this will be £60m to the government. Details about the scheme are here.
A further 750,000 passengers have to find their own way home or use any mechanism they can to retrieve the money paid for Monarch flights. And if they booked for flights after 15th December, there are fewer protections. Yet again, of course, customers have asked how a business that was clearly in bad shape could keep going.
The airline had a fleet of 35 A320s and A321s flying to 43 destinations. In 2018 Monarch was due to receive in 2018 the first of its 45 new Boeing 737 MAX-8 aircraft which would have entirely replaced its current fleet. They carried almost 5.5 million passengers last year. Monarch operated a frequent flyer programme named ‘Vantage Club’ with three membership tier levels – Indigo, Silver or Gold.
Skyscanner, the comparison site for low-cost airfares, has identified that the cost of last-minute flights to Europe for the month of October had increased 23 percent on average since the collapse.
I have never flown Monarch. While I sympathise with the many stranded folks, I really feel for the 3,500 employees today.
Mr Knight again before the collapse: ” Used to be one of the best, look how far you’ve fallen!”
The Uk (the third biggest airline market on the globe) continues to be served by these 12 carriers:
(I have flown all the airlines marked with a *)
Have you been affected by the collapse of Monarch?
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