Monarch in turbulence
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Did MON not increase their fleet size a couple of years back to increase economies of scale? What's changed now to make fewer aircraft the way forward?
Looking at it from the outside it's hard to see a market for them though. EZY/FR have the low cost market sown up. Jet2 are dominant in the north with a package holiday/low cost airline combi, TOM/TCX have a large presence in the charter business. At some of their main bases, MON face huge competition:
EZY/Norweigian/BA from LGW
EZY from LTN
EZY/Jet2 from MAN
Jet2 from LBA (if they stay there)
Only BHX offers some sort of chance, with no low cost carrier based there (yet). It's hard to see a clear differentiation and while most people would probably instinctively prefer to travel MON v EZY/FR, the actual product isn't any better and doesn't justify higher prices.
Good luck to everyone involved with the company
Looking at it from the outside it's hard to see a market for them though. EZY/FR have the low cost market sown up. Jet2 are dominant in the north with a package holiday/low cost airline combi, TOM/TCX have a large presence in the charter business. At some of their main bases, MON face huge competition:
EZY/Norweigian/BA from LGW
EZY from LTN
EZY/Jet2 from MAN
Jet2 from LBA (if they stay there)
Only BHX offers some sort of chance, with no low cost carrier based there (yet). It's hard to see a clear differentiation and while most people would probably instinctively prefer to travel MON v EZY/FR, the actual product isn't any better and doesn't justify higher prices.
Good luck to everyone involved with the company
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Monarch does not have a future that's attractive, and its airline business will ultimately be bought for a song or there'll be a form of pre-pack.
It's tried quite a bit recently, but the question is where do you go?
It's tried quite a bit recently, but the question is where do you go?
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quartic
Cabin interior
I recently flew back into LGW after we landed an Easyjet Capt came on to the flight deck to say he thought the sky interior fitted to our 737 was a huge improvement over the interior on the easyjet airbus, having said that he pointed out that the flight deck was from the ark !!
Pensions will be problematic, even if the (non UK) owners offer to underwrite the deficit the regulator will not allow them to do post sale and will require the money to be paid into the PPF scheme, in most cases this means an haircut for those who have yet to draw their pensions, blame one Gordon Brown for the destruction of the final salary pension scheme.
I recently flew back into LGW after we landed an Easyjet Capt came on to the flight deck to say he thought the sky interior fitted to our 737 was a huge improvement over the interior on the easyjet airbus, having said that he pointed out that the flight deck was from the ark !!
Pensions will be problematic, even if the (non UK) owners offer to underwrite the deficit the regulator will not allow them to do post sale and will require the money to be paid into the PPF scheme, in most cases this means an haircut for those who have yet to draw their pensions, blame one Gordon Brown for the destruction of the final salary pension scheme.
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ManUtd1999
Ryanair has had a 4 aircraft BHX base since 2008...
If the airport cooperated the idea was (is?) a large Midlands base there. As we all know after this date Ryanair stopped taking deliveries of new aircraft, but these are set to resume imminently.
With Monarch possibly in trouble, maybe this is an added incentive for them, they already fly to several Monarch destinations from BHX: ALC, BCN, FAO, FUE, LPA, IBZ, ACE, PMI, AGP & TFS. Further more MON destinations within the existing Ryanair network are not (yet) flown from BHX...
Only BHX offers some sort of chance, with no low cost carrier based there (yet).
If the airport cooperated the idea was (is?) a large Midlands base there. As we all know after this date Ryanair stopped taking deliveries of new aircraft, but these are set to resume imminently.
With Monarch possibly in trouble, maybe this is an added incentive for them, they already fly to several Monarch destinations from BHX: ALC, BCN, FAO, FUE, LPA, IBZ, ACE, PMI, AGP & TFS. Further more MON destinations within the existing Ryanair network are not (yet) flown from BHX...
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Skyjob
I would imagine that BHX would not been keen on having the bulk of their holiday traffic in the hands of one airline, especially Ryanair, it may come to that of course, i think Jet2 would be very cautious about moves into BHX for fear of route dilution, in much the way that bmibaby was.
I would have thought it was more up easyJet's street and Norwegian have shown no signs of basing or route interest North of LGW beyond some Manchester/Edinburgh services from Scandinavia
I think we are for now approaching the point of too many seats chasing too few bums or bums with not enough money to take the number of holidays they perhaps did a few years back?
I would have thought it was more up easyJet's street and Norwegian have shown no signs of basing or route interest North of LGW beyond some Manchester/Edinburgh services from Scandinavia
I think we are for now approaching the point of too many seats chasing too few bums or bums with not enough money to take the number of holidays they perhaps did a few years back?
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Thomas Cook and Thomson are presented in the airport as well...
Hardly like Ryanair would be the only operator there catering for the needs of holiday traffic.
Further more:
easyJet flies to BHX from Belfast.
Germanwings from Hamburg and Tegel.
Turkish also comes in daily and advertises a lot inside the terminal.
None of the above cater for any holiday traffic at present in significant numbers.
If it would be up easyJet's street, would they not already have expanded into BHX in recent years when Ryanair operates full flights from there?
Rumours about Norwegian are always around.
Hardly like Ryanair would be the only operator there catering for the needs of holiday traffic.
Further more:
easyJet flies to BHX from Belfast.
Germanwings from Hamburg and Tegel.
Turkish also comes in daily and advertises a lot inside the terminal.
None of the above cater for any holiday traffic at present in significant numbers.
If it would be up easyJet's street, would they not already have expanded into BHX in recent years when Ryanair operates full flights from there?
Rumours about Norwegian are always around.
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Norwegian
I have not heard BHX mentioned for/by Norwegian either as a base or routes, in fact there has been no serious new base chatter at all, i think the last new base chatter was around 12 months ago about the now opened BCN/MAD bases.
Some on/off mutterings about Berlin/Rome, i think the latter is now very unlikely with the Easy/FR/Vueling bun fight
If you view EMA & BHX as one airport, at least from a customer perspective then it seems most needs are covered
I have not heard BHX mentioned for/by Norwegian either as a base or routes, in fact there has been no serious new base chatter at all, i think the last new base chatter was around 12 months ago about the now opened BCN/MAD bases.
Some on/off mutterings about Berlin/Rome, i think the latter is now very unlikely with the Easy/FR/Vueling bun fight
If you view EMA & BHX as one airport, at least from a customer perspective then it seems most needs are covered
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Easy MONey?
Since this is a rumour network; plenty of peeps on the ground at MAN today who were under the impression that EZY could be weighing up MON as an acquisition. Now that would be interesting.
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On the face of it EZY taking over MON would make sense. easy are on pretty much all of Mons scheduled routes so would immediately increase their market share and take all their slots, and gain an instant big presence in BHX. From next summer Mon fleet is only A320/A321 so no issues with crew compatibility/retraining.
The Mon DB pension scheme liability would be an issue for easy. However, if the Mon turnaround works and Mon maintains/increases market share then easy would have to engage in a price war to squash Mon which together with the lost extra profit from the extra market share from buying in now may cost more than the scheme contributions (drip fed over many years) would. If Mon is later floated for a big investor profit easy may regret not buying in cheap now. Of course, if the turnaround doesn't work they'll pick off the remains for free, but with competition from other airlines that won't be as big a piece of the pie.
So I guess it comes down to how likely easy think the Mon turnaround will work.
The Mon DB pension scheme liability would be an issue for easy. However, if the Mon turnaround works and Mon maintains/increases market share then easy would have to engage in a price war to squash Mon which together with the lost extra profit from the extra market share from buying in now may cost more than the scheme contributions (drip fed over many years) would. If Mon is later floated for a big investor profit easy may regret not buying in cheap now. Of course, if the turnaround doesn't work they'll pick off the remains for free, but with competition from other airlines that won't be as big a piece of the pie.
So I guess it comes down to how likely easy think the Mon turnaround will work.
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Rushed approach
An interesting concept and of course Easy did this with GO a few years back, but there would still be a lot of redundancies in back & front office staff, management and the pension problem, could any of the players be interested?
Ryanair, very unlikely, wrong fleet and adding 6-8m pax is small beer for them
Easyjet, as you say possible, same fleet,previous form, capitalise on LGW position
Norwegian, wrong timing, fleet wouldn't be an issue with both Airbus and Max on order and would at a stroke establish them as a serious player in the UK, could they afford it?
Vueing IAG funded, so money not a problem, same fleet
Jet2, would be a huge leap and MAEL could transform their maintenance, probably too big for them management wise
The pension problem is the same for all, but that can be sorted by the owners, but the regulator will not allow a drip feed from a non UK company and will force the fund into the PPF
Turn around is of course possible, but dealing with the level of reduction reported in the press* will take serious management time and the loss of staff morale would come at a time when they are trying to improve the customer experience.
Having twice faced this situation i would not wish it on anybody and a swift easyJet takeover would be best for most of Monarch's employee's
Ryanair, very unlikely, wrong fleet and adding 6-8m pax is small beer for them
Easyjet, as you say possible, same fleet,previous form, capitalise on LGW position
Norwegian, wrong timing, fleet wouldn't be an issue with both Airbus and Max on order and would at a stroke establish them as a serious player in the UK, could they afford it?
Vueing IAG funded, so money not a problem, same fleet
Jet2, would be a huge leap and MAEL could transform their maintenance, probably too big for them management wise
The pension problem is the same for all, but that can be sorted by the owners, but the regulator will not allow a drip feed from a non UK company and will force the fund into the PPF
Turn around is of course possible, but dealing with the level of reduction reported in the press* will take serious management time and the loss of staff morale would come at a time when they are trying to improve the customer experience.
Having twice faced this situation i would not wish it on anybody and a swift easyJet takeover would be best for most of Monarch's employee's
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A fair bit of EZY base maintenance is carried out by monarch and they were in discussion for this to be extended to line maintenance so perhaps the engineering side is of interest to them
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Any takeover is unlikely IMO but EZY would be clear favourites. Vueling is an interesting shout. It'd get them established in the UK and there's fleet commonality. They are much more low-cost though and IAG haven't shown much interest in making changes at Vueling. They seem happy enough to let them get on with it whilst IAG focus on IB/BA.
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Purchasing Monarch is nothing like buying GO. Go was a serious threat to the easyjet brand and so eventually it's market share. On paper the opportunity was probably to good to miss especially given who was funding the whole thing.
If the M's have decided not to invest another sum of money again like they have done twice in the last 7 years then why would they fill the massive pension deficit of £140 - £150 million estimate if even to get a free sale?
With regards to IAG who owns Vueling with a lower cost base than Easyjet, why would they even bother far easy to jump into the hole that's left behind.
There are easier and far cheaper options.
If the M's have decided not to invest another sum of money again like they have done twice in the last 7 years then why would they fill the massive pension deficit of £140 - £150 million estimate if even to get a free sale?
With regards to IAG who owns Vueling with a lower cost base than Easyjet, why would they even bother far easy to jump into the hole that's left behind.
There are easier and far cheaper options.