Monarch in turbulence
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Monarch to exit the charter market in 2015
Not sure if this aspect of their strategic review was common knowledge yet. Also not sure how this might impact the "terms and endearment" or hiring:
Monarch Airlines to exit charter market in Spring 2015 - ch-aviation.com
Good luck to all!
Monarch Airlines to exit charter market in Spring 2015 - ch-aviation.com
Good luck to all!
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Clamchowder
I think 'going under' is very unlikely, my personal view is that the owners have had enough, i think an equity partner is unlikely and a trade buyer even less so given what are likely to be generous pension & conditions which would have to be respected.
I think a visit from the suits will recommend selling of the engineering arm, for which i suspect there will be a market, maybe also Cosmos,
Comparisons with Flybe's alleged revival don't add up, they are a public company that over stretched themselves with bases and aircraft orders, but operate in a totally different market, the question is what do Monarch have to offer that you can't get from the likes of Jet2, easy, Ryanair, Norwegian? its loyal customer base is old and not web literate
I think a visit from the suits will recommend selling of the engineering arm, for which i suspect there will be a market, maybe also Cosmos,
Comparisons with Flybe's alleged revival don't add up, they are a public company that over stretched themselves with bases and aircraft orders, but operate in a totally different market, the question is what do Monarch have to offer that you can't get from the likes of Jet2, easy, Ryanair, Norwegian? its loyal customer base is old and not web literate
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Yes, but that's where the disposable money is
Pensioner income growth outstrips inflation | The Actuary, official magazine of SIAS and The Actuarial Profession
Pensioner income growth outstrips inflation | The Actuary, official magazine of SIAS and The Actuarial Profession
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Rushed approach
Try telling Granny that outside of London !! in any event they are more likely to book a package holiday rather than a DIY one and Monarch is chasing after the same market as the rest of the bucket & spade brigade
Hopefully the new management know what they are doing, but it beggars believe that they could spend 9 months debating over Boeing/Airbus/C series then announce an order for aircraft they can't finance and two weeks later announce they are closing EMA & possibly LBA to take on Ryanair & EasyJet and according to PPJN have just upped pilots salaries by above inflation increase.
Hopefully the new management know what they are doing, but it beggars believe that they could spend 9 months debating over Boeing/Airbus/C series then announce an order for aircraft they can't finance and two weeks later announce they are closing EMA & possibly LBA to take on Ryanair & EasyJet and according to PPJN have just upped pilots salaries by above inflation increase.
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Mr M
The question is why should a tight billionaire octogenerian give a monkey's about a crumbling airline?
Now, let me tell you something: ZB has been sold to F7.
Yes, you see the Swiss connection there?
Voilà!
Now, let me tell you something: ZB has been sold to F7.
Yes, you see the Swiss connection there?
Voilà!
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LNIDA, you're obviously looking at a different PPJN Monarch page to the one I've just checked then, which still shows the 2013 pay scales. There will be no above RPI rise for pilots this year no matter what PPJN might say. You obviously have no idea about how this airline makes its money - the airline itself doesn't necessarily have to buy the jets!
Winerhofer, because he has done so for the past 46 years and the jets all have his initial on their tails.
Winerhofer, because he has done so for the past 46 years and the jets all have his initial on their tails.
This company has never made a large profit but then that was never the point. The basic premise has been that the family buy the aircraft and lease them to the airline. The airline operates them and pays a lease back to the owner. This lease amount has been paid continually long after the aircraft have been paid for. You do not become worth $5 bn without some clever business practice. This all worked well before the advent of low cost carriers and a family holiday company would buy the seats on the aircraft to keep them busy.
The company's financial affairs have always been a closely guarded secret but there are only three principal shareholders to answer to which is very unusual in this industry.
The events of recent years including the banking crisis has made financing the aircraft more difficult and the rise of low cost has also made it more difficult to fill the aircraft seats. I cannot imagine that the senior members of the family will allow the company which has made them phenomenally rich to fold but I worry about the younger generations who have always been in a family of billionaires and their commitment to the group. Perhaps they need to be taught the same lesson that Warren Buffet taught his three children when he disinherited them and they will have to earn their own money.
The company's financial affairs have always been a closely guarded secret but there are only three principal shareholders to answer to which is very unusual in this industry.
The events of recent years including the banking crisis has made financing the aircraft more difficult and the rise of low cost has also made it more difficult to fill the aircraft seats. I cannot imagine that the senior members of the family will allow the company which has made them phenomenally rich to fold but I worry about the younger generations who have always been in a family of billionaires and their commitment to the group. Perhaps they need to be taught the same lesson that Warren Buffet taught his three children when he disinherited them and they will have to earn their own money.
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That's a myth. Buffet will be handing down plenty of money to his kids, just not the whole lot. He's said he wants them to have enough money that they feel they can do anything but not too much that they will do nothing. They're not going to starve and compared to us they will still be fabulously wealthy. Anyway back to the topic....
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17-Aug-2014
Monarch airline axes 1,000 jobs in attempt to lure saviour
MONARCH AIRLINES is to cut more than 1,000 jobs — about one-third of its staff — as part of a drastic overhaul to cut losses and woo new investors.
All charter and long-haul flights will be axed, and the aircraft fleet shrunk from 42 to 30.
The drastic plan has been drawn up by new chief executive Andrew Swaffield in an effort to restore the airline to profitability. Internal projections show the carrier is likely to lose about £60m this year.
The specialist American aviation advisory firm Seabury Capital is leading the hunt for new investors, with about a dozen financial players — private equity and other investment funds — in the frame.
One obstacle is Monarch’s pension black hole. A defined benefit scheme, closed to new members more than a decade ago, it still has a deficit of £158m. Talks have begun with trustees and the pensions regulator about a solution.
The 47-year-old airline is a stalwart of the British holiday scene, carrying 6m passengers a year to destinations in the Mediterranean.
It is headquartered at Luton airport and with its aircraft maintenance division and Cosmos tour-operator arm has 3,300 employees.
It is owned by Switzerland’s billionaire Mantegazza family.
The Mantegazzas, who have regularly injected cash in recent years to make good losses, have accountant PwC standing by to take charge if a new investor is not found. Swaffield was recruited from British Airways’ parent company IAG to run the airline in April.
He was promoted to chief executive of Monarch Group in July after the abrupt departure of executive chairman Iain Rawlinson.
Monarch declined to comment yesterday, but potential investors have been given an outline of Swaffield’s plan.
He will ditch Monarch’s historic “hybrid” model, which saw it mix charter flying — one-off flights for tour operators — with scheduled services.
Charter flights will end and the company will become a budget carrier operating only scheduled flights.
Large cost cuts, to bring the airline’s overheads in line with those of big rival easyJet, are to be announced in the next few months.
Last week the airline said it would shut its base at East Midlands airport, and the base at Leeds/Bradford is also under review.
Swaffield and chairman Sir Roy McNulty — the Northern Irish businessman who has chaired the Civil Aviation Authority — hope to find new investors by Christmas.
It is understood the Mantegazzas would be prepared to relinquish control if the right deal can be found.
The management are pursuing a “solvent” sale — they do not want to put the company into administration to ditch legacy costs, including the pension scheme.
Dean Street, a City investment banking boutique, is helping in the hunt for new funds, and KPMG, the accountant, has prepared an information pack for investors.
Industry experts say that, while the cost cuts are promising, Monarch will still struggle to compete against easyJet and Ryanair, the two titans of the low-cost airline world.
MONARCH AIRLINES is to cut more than 1,000 jobs — about one-third of its staff — as part of a drastic overhaul to cut losses and woo new investors.
All charter and long-haul flights will be axed, and the aircraft fleet shrunk from 42 to 30.
The drastic plan has been drawn up by new chief executive Andrew Swaffield in an effort to restore the airline to profitability. Internal projections show the carrier is likely to lose about £60m this year.
The specialist American aviation advisory firm Seabury Capital is leading the hunt for new investors, with about a dozen financial players — private equity and other investment funds — in the frame.
One obstacle is Monarch’s pension black hole. A defined benefit scheme, closed to new members more than a decade ago, it still has a deficit of £158m. Talks have begun with trustees and the pensions regulator about a solution.
The 47-year-old airline is a stalwart of the British holiday scene, carrying 6m passengers a year to destinations in the Mediterranean.
It is headquartered at Luton airport and with its aircraft maintenance division and Cosmos tour-operator arm has 3,300 employees.
It is owned by Switzerland’s billionaire Mantegazza family.
The Mantegazzas, who have regularly injected cash in recent years to make good losses, have accountant PwC standing by to take charge if a new investor is not found. Swaffield was recruited from British Airways’ parent company IAG to run the airline in April.
He was promoted to chief executive of Monarch Group in July after the abrupt departure of executive chairman Iain Rawlinson.
Monarch declined to comment yesterday, but potential investors have been given an outline of Swaffield’s plan.
He will ditch Monarch’s historic “hybrid” model, which saw it mix charter flying — one-off flights for tour operators — with scheduled services.
Charter flights will end and the company will become a budget carrier operating only scheduled flights.
Large cost cuts, to bring the airline’s overheads in line with those of big rival easyJet, are to be announced in the next few months.
Last week the airline said it would shut its base at East Midlands airport, and the base at Leeds/Bradford is also under review.
Swaffield and chairman Sir Roy McNulty — the Northern Irish businessman who has chaired the Civil Aviation Authority — hope to find new investors by Christmas.
It is understood the Mantegazzas would be prepared to relinquish control if the right deal can be found.
The management are pursuing a “solvent” sale — they do not want to put the company into administration to ditch legacy costs, including the pension scheme.
Dean Street, a City investment banking boutique, is helping in the hunt for new funds, and KPMG, the accountant, has prepared an information pack for investors.
Industry experts say that, while the cost cuts are promising, Monarch will still struggle to compete against easyJet and Ryanair, the two titans of the low-cost airline world.
Last edited by Winnerhofer; 17th Aug 2014 at 14:02.
I REALLY SHOULDN'T BE HERE
AlexanderDeMeerkat - you should have ended your post after the first sentence. Thinly disguised easyjet banner waving is not appropriate in the context of people losing their jobs - shame on you. I hope you never face redundancy in a job which your family depends upon the income - it is not a nice place to be and certainly isn't an issue to point score on. Perhaps you would consider editing your post to remove your glib dig and replace it with something more thoughtful and mature.
Last edited by speedrestriction; 17th Aug 2014 at 15:14.
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Whilst Meerkats comments lack tact, his observation is correct. I have witnessed several colleagues do the same, for all the right reasoning, over the last 24 months. What seemed a golden opportunity then is beginning to look like a poison chalice. Good luck to those at the bottom of the seniority list.
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The vast majority of pilots that move to Monarch from easy are FlexiCrew F/Os. To my knowledge only a handful of pilots (if that) has ever moved from Monarch to easyJet.
The conclusion must surely be that, other than for FlexiCrew, each respective group within the two companies on permanent contracts must be reasonably happy with their lot? They are both good companies to work for.
By the way, despite the press continually getting this wrong, Monarch has been a mostly scheduled carrier for the last 10+ years and is simply completing the transition to fully scheduled flying. During that period it has competed very successfully with easy and Ryan on its core routes, and there is absolutely no reason why it cannot continue to do so in the future, particularly with the order for 30 new aircraft.
The conclusion must surely be that, other than for FlexiCrew, each respective group within the two companies on permanent contracts must be reasonably happy with their lot? They are both good companies to work for.
By the way, despite the press continually getting this wrong, Monarch has been a mostly scheduled carrier for the last 10+ years and is simply completing the transition to fully scheduled flying. During that period it has competed very successfully with easy and Ryan on its core routes, and there is absolutely no reason why it cannot continue to do so in the future, particularly with the order for 30 new aircraft.
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Rushed approach
You imply in your response to LNIDA that the M family have made huge amounts of money by leasing aircraft to Monarch and thereby transferring profits from an operating airline in the UK to a leasing company in Switzerland, all perfectly legally, but surely the problem with that is you lose sight of what the business is about in much the same way that bmi became a slot sitter at LHR for Bishop's exit plan,rather than a focused airline.
Ditto the engineering at MAEL in exactly the same way that bmi used bmi engineering, in good times its a good way of moving money around, but in lean times incestuous relationships breed poor business decisions.
Given the time and money this can be turnaround, moving to a one size fleet is a good start and dumping long haul makes sense, they need to make the likes of BHX/LTN/MAN their home turf
Ditto the engineering at MAEL in exactly the same way that bmi used bmi engineering, in good times its a good way of moving money around, but in lean times incestuous relationships breed poor business decisions.
Given the time and money this can be turnaround, moving to a one size fleet is a good start and dumping long haul makes sense, they need to make the likes of BHX/LTN/MAN their home turf
but surely the problem with that is you lose sight of what the business is about in much the same way that bmi became a slot sitter at LHR for Bishop's exit plan,rather than a focused airline.