Monarch - 3

[Buster the Bear]

Nothing like the suspense of the news that Greybull who own Monarch are investing £165m of their own money in a company that they own?

[bvcu]

Not much information on whats happening to jobs ? Manchester hangar and was it 300 jobs recently gone i believe............

[spottilludrop]

Monarch: what was all that about? | The Independent

[Rushed Approach]

Airlines are like a bank, as the customer is lending (depositing) money to the airline in return for a flight in the future.

If you believe this you don't know much about the way credit card companies operate.

My take is that this gives them a bit longer than the 6 months other's are guessing at - their previous burn rate on cash would suggest they should be OK for at least a year - maybe longer especially if they make some changes - especially on the lease/purchase front

This sort of comment makes no sense at all. You and others have absolutely no idea of "previous burn rate" as you only have (carefully crafted) press reports of what has been put in and absolutely no idea of what has been taken out - this company has been profitable (which nobody seems to be disputing) for the past two years and was profitable for 95% of its previous existence before late 2014 and since the late sixties under its previous owners. Previous cash injections (reported) and lots of dividends and loans repaid (not reported) makes for a pretty distorted picture to the outside world.

Everyone seems to think Greybull are shrewd, ruthless investors, so what are they doing investing (again) in a basket case then? Could it be that they have already seen a return on their initial investments in years 1 and 2?

The reality is that the cost base is the same or better than other locos since 2014 even without the benefits of the re-fleeting deal with Boeing, which will not bear fruit fully for a number of years. Yes, "Brexit" presents challenges with the weaker pound, but this applies to other UK carriers too who compete on similar routes with similar $ and Euro costs.

And as for "slashing fares" (Independent article cited above), I very much doubt that the various fares algorithms will change as it seems bookings are holding up well and better than this time last year and will always be mainly influenced by those of competitors and other market conditions.

[Brigantee]

I would agree with the parting shot Spottiludrop , There is certainly a lot of good will in the travel game towards them ...Best of luck guys

PS By all a accounts bookings are doing really well which is great news for them

[TBSC]

Something's fishy here IMHO. Why on earth did they wait until the very last minute damaging their own brand? I think there was a takeover offer (Chinese or other) which was withdrawn eventually hence the "investment" of Greybull to keep the show going on.

[Waldo1]

Seems monarch are more interested in the whole buying loads of new planes instead of sticking with what they have and concentrating in sorting out the business....

[crewmeal]

Me thinks that many spotters on here will be disappointed that they won't be seeing United 747's into other UK airports anytime soon.

Well done MON and good luck for the future!

[FANS]

Half understand the protections of CC, paypall, and indeed ATOL, but if you've got the choice to book with an EZY vs Monarch, why would you bother with Monarch unless it's a lot cheaper?

Greybull know Monarch inside out, so the only reason I can think of that they didn't do this 3 weeks ago was because they were far from convinced.

[HeartyMeatballs]

The only reason why things will be selling well will be due to deep discounting.

Monarch still have to survive the winter. Their costs have increased due to them all in the £ and it's been said that last year the profit made was only due to the fall in the price of fuel. Now if the price of oil actually goes up it could be a double whammy and it could still end in tears.

If anything it gives the good hard working people there a bit of time to look elsewhere for a job. TCX and EZY are recruiting as are BA and VS just closed. If I was there I wouldn't be seeing this as a my future being secured.

[FANS]

agree - it's been a shambolic 3 weeks for them, factual information that can be relied upon is non-existent, and they'll be getting sold down the line anyway.

If you're a decent employee, you'd surely take destiny into your own hands, rather than be dictated to this by crowd.

[HeartyMeatballs]

I most certainly would. And for anyone there who thinks they'll be bought up and simply absorbed into someone else then I'd be extremely surprised if it happened. It would be a lot cheaper for a competitor to let it implode and pick up the pieces (including people on 'refreshed' Ts and Cs). The Boeing noose, the overcapacity in the market, Brexit, terrorism, potential recession, tension with Russia. Now really isn't the time for any airline to increase its fleet size by 50 overnight. Now really isn't the time for refleeting neither.

[FANS]

Their own website talks of winter fare prices being 20% lower than last year, and discounts off November holidays etc.

So it seems they are going down route of being cheaper, which I suspect is their only option.

[HeartyMeatballs]

Lower prices will stimulate demand. However lower prices, higher costs.......

And as far as Joe Public knows, last week monarch 'nearly went bust', now they're highlighting the fact that they're selling flights on the cheap. It could look like desperation to some.

[qwertyuiop]

Originally Posted by Waldo1

Seems monarch are more interested in the whole buying loads of new planes instead of sticking with what they have and concentrating in sorting out the business....

Monarch have a variety of 320/321 aircraft. Some old, some new and quite varied in their spec and fit. Anybody thinking they are all the same is mistaken.
Replacing the fleet with 737 Max will reduce the company's operating costs by 24%. It's not hard to see why they want to go down that route.
Some believe re-fleeting with Airbus products would be simpler, I believe they made the correct choice.

[KelvinD]

Replacing the fleet with 737 Max will reduce the company's operating costs by 24%

Now that's interesting. If correct, how is Airbus selling any A320 series aircraft all? Surely this says that all airlines can slash their operating costs by significant amounts simply by swapping their fleets for 737?

[qwertyuiop]

Originally Posted by KelvinD

Now that's interesting. If correct, how is Airbus selling any A320 series aircraft all? Surely this says that all airlines can slash their operating costs by significant amounts simply by swapping their fleets for 737?

The saving calculations are based on the existing fleet, not a fleet of new Airbus products.

[gilesdavies]

Replacing the fleet with 737 Max will reduce the company's operating costs by 24%. It's not hard to see why they want to go down that route.

The saving calculations are based on the existing fleet, not a fleet of new Airbus products.

While the 24% saving is highly likely, flying a like for like route, in comparison to a 10 year old A320 for example, in maintenance and fuel costs.

But again I think this is highly imaginative accounting on Monarch's part, in the press releases where this figure is mentioned...

Monarch are only going to be receiving 6-8 aircraft a year, so will take nearly 4 years for the transition to take place from Airbus to Boeing. In this time they will be running a dual fleet, they have to pay for crew and ground staff to be converted, and equipment at bases to be changed too.

I highly doubt this 24% saving will be achievable until the Airbus fleet has been fully disposed of.

While these new aircraft will extremely fuel efficient, this comes at the cost of very high prices to purchase the aircraft and/or lease. This is where low cost carriers like Allegiant and Jet2 have decided to operate older/cheaper aircraft and the cheaper running costs out weigh the fuel savings of newer aircraft. Hence why Jet2 have ordered the previous generation 737-800's and not the max version.

While the A320/1 family Monarch operate, varied with different ages and slightly different spes, this is common for many airlines, where additional aircraft of the same type is acquired over the years.... As long as they have the same engine type and basic specifications they are more or less flying a uniform fleet.

An order for new aircraft, for a struggling airline is the last thing they need and should be trying to make do with what they have for the next few years, until they are out of the woods. But I suspect this order is too far advance and the noose around the airlines neck, hence the struggle to find a new investor or buyer.

[Brigantee]

Good news all round , I think behind all the new money being injected there maybe is a new investor waiting in the wings

HNA group seemed very interested three months ago maybe they still are ?


http://www.travelweekly.co.uk/articl...-monarch-stake

[retrosgone]

While I am relieved and pleased that Monarch appear to have lived to fly another day (and hopefully much longer), it wont have escaped anybody's attention that they required a bailout when Greybull took them over, and now they have required another, even larger, cash injection. This is despite pulling in their horns and drastically cutting terms and conditions etc.

No saviour appears to be waiting offstage, so unless we have been missing something all along, how do they propose to escape from their cash-flow doldrums and generate real (as opposed to operating) profits? What has really changed, apart from an ever tougher market with Brexit, problematic exchange rates, rising oil prices and very low demand for Turkey and North Africa. A Cunning Plan is required. Answers on a postcard - - -