The ash cloud had a number of airlines allegedly teetering on the brink, so they say... It's certainly been a good excuse for penny pinching at my previous employer and is still to this day! I don't think Monarch were the only airline sucker-punched by that whole debacle, especially when you see how wound up other airline executives were getting at the time...!
Monarch Airlines is also an arm off the Monarch group as a whole, the engineering side of which is a very successful business. To reposition the airline, give it a defined focus to work towards and championing that through advertising is absolutely the right thing to do during tough times, resting on its laurels and haemorrhaging more money through inefficiency is not.
Oh and that bit about no-body knowing who Monarch are... Maybe in New Zealand but in the UK? Well, thats simply not true is it...