Monarch “refinanced” themselves in 2009 with 45 million pounds. This according to their management allowed them to be profitable in 2010 but in 2011 they made a loss of 45 million pounds again, which was covered with “refinancing” of 75 million pounds from the shareholders and the Swiss owner Sergio M.......
Well nearly, ‘cos we now find out that they sold their two Airbus 330s to a lessor and contracted to lease them back. Since the two aircraft in question are only 13 years old, the deal must have been worth many millions, so multimillionaire Swiss owner Sergio M didn’t have to dig into his pockets too deeply to “refinance” Monarch. Nevertheless important assets have now been sold and the company is worth that much less and is that much more vulnerable if the extraordinary expansion plans don’t work out in the present and near future adverse financial panorama.
Swiss owner Sergio M installed his son Fabio M at the helm of Monarch some time back and it would appear he has been totally incapable of stemming the haemorrhaging. Of course the real culprits have been the previous management teams and marketing departments but if you are losing 4 million every month, even if you have deep pockets or you didn’t have to earn the money in the first place, you take some actions to mitigate the problem, specially if you stand to lose the money yourself and your close family
Anyway no problem Fabio M has lots of money now and we know that the charter business was not profitable, so we abandon that side of the business. Long haul isn’t profitable either, as most of it is charter and Cosmos cannot sell long haul, so we pull out of that too. The great commercial plan for the future is to go loco/schedule, open new bases, with new and standard routes and do it very quickly before anyone realizes what we are doing, not even the customers! Never have done before but now we have the cash mountain, let’s advertise, as the general public won’t be able to resist us, as soon as they know what we have to offer! We have nothing different to offer from the rest but we ARE Monarch!
Quick expansion did you say? Ah well, yes we have 400+ pilots and yes they only fly 40 to 60 hours a month but we only have 32 hulls and cannot meet our commitments at the moment without incurring our passengers in long delays, even though we have the best engineering company in the UK. OK we open two new bases this year at BHX and EMA and try and poach customers from BMIbaby, with whom no one will want to fly, as they are closing down. We lease 4 hulls from other airlines to do the job until October and we get our foot in the door, expensive deal but we’ll pull thru’....hopefully. All this regardless of the fact that BMIbaby would have cleaned up the majority of would be customers for July, August and September, leaving the dregs to Monarch for the period 11 September to the end of October. If BMI baby routes were such a good bet, why didn’t Monarch buy or partially buy the company? BA would have jumped at any deal and save some jobs, probably better than the total shutdown anyway.
The best one is the proposed base at LBA but enough has been said on that one previously. Just one comment, which is that Monarch will be competing with JET2 on their home base with their leased aircraft against JET2’s wholly owned aircraft, which are fully refurbished+new seats. Any bets on the winner?
Well they have the support of two profitable travel companies namely AVRO and COSMOS, you may say. There was some years ago a reason for AVRO as a flight seat selling agent to the travel trade, when charter flights were the norm and we lived in a totally different travel business environment, but nowadays AVRO would appear to be superfluous in these low cost times. If AVRO make a profit it will be on heavily discounted Monarch tickets, which is 99% of their business. And if the AVRO ticket sales are heavily discounted that accounts for part of the Monarch losses. The same principle applies to Cosmos. If their fairly small IT programme is profitable it can only be ‘cos they get heavily discounted flight tickets from Monarch and thus contribute to Monarch’s losses. Ah yes, the Engineering Company, you may point out. OK profitable but on whose back? My bet is that Monarch would have much cheaper servicing if it was allowed to go to the open market instead of paying higher than average costs to their in house engineering company, so again another house company sucking dry the airline. Without doubt other airlines pay less going elsewhere and still manage better time keeping than Monarch.
If Monarch have 400+ pilots in employment at the moment and only 32 aircraft, then they are over crewed and especially so if next year they won’t have any Long Haul. With 400+ pilots Monarch have enough to fly 40 aircraft on short haul, which is eight more aircraft than they now have. Considering that by the end of summer 2014 they will be retiring 3 B757s and 4 A300s, they have time enough to see how next summer works out before taking any new pilots now. If they take on 100 new pilots for next summer, as mentioned here, what are these guys going to be flying and how many hours every month. As admitted earlier in this forum, a MON pilot says that they only fly 40 to 60 hours per month......, which seems to hold up the theory that they are presently over crewed and have enough crews even for next year’s folly.
Never mind chaps if you get a job with Monarch you can rely on strong BALPA union representation, only problem is that those first in are the last out at the first sign of any redundancies and the reverse situation for the new entrants, last in are first out, so don’t burn any boats and put wax in your ears or tie yourselves to the main mast of the ship before setting sail in the open sea.....the sirens’ call is not all it’s made out to be.....
Monarch deserves better management than they have at present and they deserve to be profitable and thrive but the business can never thrive on losses, refinancing and reckless expansion into the unknown.
If there are any responses to my comments above, it would be appreciated if they were offered with facts and figures and not a simple “rubbish” statement. Thanks. Most of the information here can be found in previous posts in various forums.
Last edited by DjerbaDevil; 15th Jul 2012 at 20:42.