Let me see if I have this correct
a/c was on return leg Iceland to Gatwick with many child pax and parents on day trip. EGCC was scheduled en route stop
a/C WAS NOT u/s at Mcr but retasked for commercial reasons
Mcr - Gatwick flight time ~ 1 hr, Coach time 4+ hr
If airlines can transfer pax to road for operational reasons then most will go by train or coach whilst paying the higher price for flying inc extras such as security tax, baggage surcharge, passenger tax for a £20 coach ride Compensation should be payable for en route operational delays at same rate as departure delays.
If the coach had crashed who would have been liable? I doubt the airline despite the journey being provided on the airline ticket. I have no problem with safety or weather delays, provided I am kept informed and treated as a sentient being but too often treated as SLF for 'operational' reasons
In this case, as Monarch prob realised, they would have been in breach of contract, hence the re-think.