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Monarch - 3

Old 12th Oct 2016, 08:33
  #3841 (permalink)  
 
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Beeb report:-

UK airline Monarch has settled worries over its future by agreeing a 165m investment from Greybull Capital.

The fresh financing has allowed the airline to renew its membership of the Air Travel Organisers' Licensing (Atol) scheme - the scheme that refunds customers if a travel firm collapses. It also means the airline can invest in new aircraft.

Greybull Capital is Monarch's majority shareholder and is also known for its investment in Scunthorpe's steelworks. It bought a majority stake in Monarch in 2014, with a reported investment of 125m.

"It is testament to the extensive effort by all parties, over the past weeks and months, that we are able to announce the largest investment in our 48-year history, as well as the renewal of our Atol licences," said Andrew Swaffield, chief executive of the Monarch Group.

In October 2014, Monarch announced an order for 30 of the latest Boeing 737 jets, with an option to buy 15 more. It expects to take delivery of the first of those in 2018.

After three weeks of drama, Monarch lives to fly another day. How long the holiday airline retains its independence, however, remains open to question. This morning's bailout - there is no detail on what form the extra 165m from owners Greybull Capital will take - is enough to satisfy the Civil Aviation Authority, but will not remove doubts about its long-term prospects. The airline's strength in flights to the western Mediterranean, Egypt and North Africa has become its Achilles' heel as terror attacks have dented demand to those destinations. On top of those short-term trading challenges, Monarch remains caught between the big low-cost airlines EasyJet and Ryanair, and the in-house airlines owned by the big tour operators including Tui and Thomas Cook.

Securing the company's future will require to find a profitable niche that it can defend from both those types of voracious competitors. The alternative may be a merger with a rival.
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Old 12th Oct 2016, 08:55
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Don`t forget Jet2 who are now a major competitor in the UK market and moving south to an airport near you.
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Old 12th Oct 2016, 09:17
  #3843 (permalink)  
 
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Securing the company's future will require to find a profitable niche that it can defend from both those types of voracious competitors. The alternative may be a merger with a rival.
They've given themselves six months to sell out to Jet2 or close surely.
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Old 12th Oct 2016, 09:22
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Certainly looks that way, nothing from outside investors,nothing by way of restructuring the company. The finance deal with Boeing will put them on a better footing for a takeover and Greybulls money will keep them going until a buyer is found.
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Old 12th Oct 2016, 09:29
  #3845 (permalink)  
 
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First things first, Skipness you are a bit of a wally for repeatedly peddling doom, gloom and pessimism about Monarch, even when there's something really positive! Either you are a worried competitor or you just need to get a life!

Secondly, there'll be no sale to jet2 because they couldn't afford us. Closing is what our competitors want us to do - not happening!

Get over it!
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Old 12th Oct 2016, 09:32
  #3846 (permalink)  
 
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Great news ,HH and one or two others must be devastated ......
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Old 12th Oct 2016, 09:37
  #3847 (permalink)  
 
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First things first, Skipness you are a bit of a wally for repeatedly peddling doom, gloom and pessimism about Monarch, even when there's something really positive! Either you are a worried competitor or you just need to get a life!
The business has struggled greatly in recent years and like BA, has been trading on a past reputation that's disconnected from the reality that to compete with FR/EZY/LS/DY you need their cost base and structures.
To survive MON will need to be as close to that space as possible except they are either larger in the case of three and more focused on packages like LS. Monarch have been squeezed badly, this has gotten worse, and their main shareholder has allowed a situation to develop where consumer confidence has collapsed going into the quiet trading period, i.e. poor trading just got much worse. Not only that, all talk of new investors has been shown to be a myth.

If a business needs something like a sugar daddy Swiss billionaire to survive it won't last long if daddy cuts off the credit cards. I have no idea why Greybull allowed this to happenas they've increased the chances of MON closing by not putting the money in earlier.

It's barely a lifeline to see them through to the summer by which time people will still have this crisis in mind when booking. Far from out of the woods, they need a proper investor or a sale.
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Old 12th Oct 2016, 09:38
  #3848 (permalink)  
 
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Good news for the staff, customers & suppliers.

Can't understand why Greybull didn't do this 3 weeks ago!
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Old 12th Oct 2016, 09:38
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Originally Posted by Crosswind Limits View Post
First things first, Skipness you are a bit of a wally for repeatedly peddling doom, gloom and pessimism about Monarch, even when there's something really positive! Either you are a worried competitor or you just need to get a life!

Secondly, there'll be no sale to jet2 because they couldn't afford us. Closing is what our competitors want us to do - not happening!

Get over it!
I think they could easily afford you if they wanted!
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Old 12th Oct 2016, 09:51
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You`re right, there won`t be any sale to Jet2..They are smart business cookies. Bmi Baby was a much better fit for them,but they just watched it get wound up and picked out the bits they wanted and got it all for free...
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Old 12th Oct 2016, 09:51
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Mmmmm.....I still have concerns that Monarch will not make it.

The extra funding will only delay the inevitable IMHO and I would imagine Easyjet would be the company most likely to pick up the pieces.

The CEO did not sound very convincing on Radio 4 just a few hours ago.

We are just entering a downturn in the industry and the likes of Monarch, Air Berlin, Norwegian and a fair few others are going to struggle and will most likely not make it out of the other side I am afraid to say.
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Old 12th Oct 2016, 09:56
  #3852 (permalink)  
 
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We all know that Greybull are not long term investors, and therefore the airline is effectively up for sale.

This latest round of emergency funding has been beyond belief, and I can't see many customers wanting to lend Monarch money until they fly. Even with ATOL.
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Old 12th Oct 2016, 09:56
  #3853 (permalink)  
 
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This is really good news for all my friends and colleagues at MON.

For the record the previous Swiss Italian owners were far from a sugar daddy. They never ran the company properly because that was never their plan and in the end shafted the employees. To suggest they were anything other than this is disingenuous and shows ignorance of what really happened.

I also believe Jet2 couldn't afford Monarch. They have an inferior product to MON by all accounts.

However, the question remains how long can Monarch remain independent. I think ultimately a sale or merger is likely!
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Old 12th Oct 2016, 10:07
  #3854 (permalink)  
 
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`They have an inferior product to MON by all accounts`....You sure about that, as you don`t seem to have tried the Jet2 product. I`ve tried both, but much prefer Jet2. But not just me it seems, in July they were voted into the top 10 of world airlines by Trip Advisor, based on the views of people who had travelled with them..

So yes they could afford Monarch but from a business perspective, why would they??....They have no need of them
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Old 12th Oct 2016, 10:09
  #3855 (permalink)  
 
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We all know that Greybull are not long term investors, and therefore the airline is effectively up for sale.

This latest round of emergency funding has been beyond belief, and I can't see many customers wanting to lend Monarch money until they fly. Even with ATOL.
Do you never give up! I feel sure that for some unknown reason you'd be pleased to see Monarch fail!

You're right however that Greybull are venture capitalists. Their modus operandii is to buy poorly businesses, return them to health, and then sell them on at a profit ( i.e. recovering their investment plus a bit). Sometimes, such as in the case of "M" shops, they made a misjudgment, but they wouldn't still be in business if they didn't, more often than not, make the right decisions.

However, the question remains how long can Monarch remain independent. I think ultimately a sale or merger is likely!
For the reasons stated above I think that is a foregone conclusion. Question is whether that is in 2 years (unlikely) 5 years or 10 years.
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Old 12th Oct 2016, 10:15
  #3856 (permalink)  
 
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Paully

I have flown on both when positioning for duty and have friends and colleagues who have worked and still work for both airlines.

Of course you prefer Jet2, just remind me where you are from??
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Old 12th Oct 2016, 10:29
  #3857 (permalink)  
 
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And just remind me who you work for????????
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Old 12th Oct 2016, 10:39
  #3858 (permalink)  
 
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I don't work for Monarch. Currently doing seasonal work for a small outfit.

Does that answer your Q?
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Old 12th Oct 2016, 10:45
  #3859 (permalink)  
 
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Rest assured ATNotts, Greybull will do what's right....for them
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Old 12th Oct 2016, 11:41
  #3860 (permalink)  
 
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So a few months ago Greybull were trying to offload the airline to a seller (which seems no one wanted) and now they are investing 165 million into the business...(!?)

This in my opinion, is a load a spin, some imaginative accounting and were not being told half the story!

As a BBC analyst suggested this morning on the radio, this 165 million, might not even be an investment and could just purely be a cash injection (another). If the case, this could also add to the airlines debt and which has to be repaid and will mean the airline will struggle further to make a profit.

If Boeing have relaxed the repayment terms on the new aircraft, this also releases a large amount of money to show in their bank account, what in theory is already allocated to the purchase of the 737's.

I'm still not convinced the airline is out the woods, and the proof in the pudding will be if/when the 737's actually start to arrive, and the airline can pay for them.

Bring on the people calling me a troll, and a Monarch hater!
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