It is not the most stupid idea on earth. In the longer term, there are three companies vying for the same space in the market - Monarch, Jet2 and bmibaby - when there is probably only room for two. It would remove some duplication in the route networks at Birmingham and Manchester, put Monarch into EMA and CWL (it said it wanted to be in EMA, BRS and NCL so feasible that it could see benefit in an alternative) and equip Monarch with some smaller aircraft to keep frequency up during the shoulder and winter seasons.
The interesting point would be whether Monarch would want to blow its brains out on the baby domestic & short-haul services....