From FT.com
Monarch Airlines has appointed a new finance director in a management reshuffle that will also give chairman Iain Rawlinson permanent chief executive responsibilities.
The privately held charter carrier and scheduled operator is in the middle of a two-year turnround plan to return it to profit next year.
High fuel prices, a difficult consumer environment and competition from airlines such as Ryanair and EasyJet contributed to an operating loss of £45m in the year to October 2011.
In November, the company’s owners injected £75m to shore up finances and allow Monarch to launch 14 routes and to add narrow-body jets to a 28-aircraft fleet.
It also unveiled plans under which the group would aim to offer shorter flights to increase revenues per seat mile – a task that has been helped by its bigger rivals raising their own fares – and to reduce costs.
“We are starting to see the benefits of our work coming through in results,” Mr Rawlinson said on Thursday.
He added that the group was “keen to maintain consistency and stability in the top team” but wanted the “experience, strength and clarity” of Robert Palmer as finance director.
Mr Palmer, a veteran of EasyJet, BMI and Air Malta, has been a consultant to Monarch for seven months and takes over from Simon Tucker, who is leaving.
The chief operating officer, Richard Mintern, is also leaving. His main responsibilities of overseeing the group’s three divisions – the airline, package tours and aircraft engineering – will be handed to an expanded finance team.
Douglas McNeill, an airline analyst with Charles Stanley, said that “as a relatively small, leisure-focused airline facing high passenger taxes, high fuel costs and bigger, ever more efficient rivals, [Monarch is] probably finding life quite tough at present.”
However, he said the group’s shareholders, dominated by the Swiss-Italian Mantegazza family, appeared ready to fund it through difficult times.
A decade ago, Monarch shifted its focus from chartered flights to being a scheduled airline. Now Mr Rawlinson wants passengers to regard the brand as a step above its low-cost rivals but as a cheaper alternative to full-service carriers.
“I’m not sure there’s a niche there,” countered Mr McNeill. “The difference [between budget and full-service airlines] is obvious for business travellers, but it’s a lot less distinct in the leisure market.”
Other small European carriers are struggling to cope with high fuel prices. Two – Hungary’s Malév and Catalonia-based Spanair – have collapsed this year.