Monarch in turbulence
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Perhaps the question will be......
Can Greybull make a quick killing by splitting MAEL, Runway slots, 737 Max line slots plus other assets and make a fast buck. This would perhaps be especially attractive if the pension problem has been solved ?
Were Greybull involved with the Comet electrical company when that business went wrong ?
Can Greybull make a quick killing by splitting MAEL, Runway slots, 737 Max line slots plus other assets and make a fast buck. This would perhaps be especially attractive if the pension problem has been solved ?
Were Greybull involved with the Comet electrical company when that business went wrong ?
Last edited by waco; 25th Oct 2014 at 01:40.
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As the ink dries, the reality of greybull trying to turn their 125m into 400m+ will set in.
The disposals of non core business will help.
And also the exit planning. Like 3i in Go, greybull will be selling on and you couldn't go too far wrong replicating ezy business model.
Ps I take it that the family have not invested in greybull?!
The disposals of non core business will help.
And also the exit planning. Like 3i in Go, greybull will be selling on and you couldn't go too far wrong replicating ezy business model.
Ps I take it that the family have not invested in greybull?!
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waco,
Seabury Designs a Turnaround Plan to Bring the Airline to Profitability –
Monarch Achieves ₤200 Million in Reductions of Annual Costs
October 24, 2014 05:17 PM Eastern Daylight Time
NEW YORK--(BUSINESS WIRE)--Seabury Group (“Seabury”), a leading global advisory and professional services firm, announced today that it has successfully advised the U.K.-based Monarch Airlines Group (“Monarch” or “the Group”) with respect to the completion of its strategic review and restructuring program. Under the program Monarch has secured ₤125 million of permanent capital and liquidity facilities provided by Greybull Capital LLP (“Greybull”) anchored by a ₤50 million capital commitment
So we save 200 million/year.....and this year we lost 60m.
I'll leave you to do the maths!
Seabury Designs a Turnaround Plan to Bring the Airline to Profitability –
Monarch Achieves ₤200 Million in Reductions of Annual Costs
October 24, 2014 05:17 PM Eastern Daylight Time
NEW YORK--(BUSINESS WIRE)--Seabury Group (“Seabury”), a leading global advisory and professional services firm, announced today that it has successfully advised the U.K.-based Monarch Airlines Group (“Monarch” or “the Group”) with respect to the completion of its strategic review and restructuring program. Under the program Monarch has secured ₤125 million of permanent capital and liquidity facilities provided by Greybull Capital LLP (“Greybull”) anchored by a ₤50 million capital commitment
So we save 200 million/year.....and this year we lost 60m.
I'll leave you to do the maths!
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Tubby Linton - SFB for Jet2? I've heard about the damp lease airbus but though it was doing regular Mediterranean route? For example filling it once rather than doing 2 flights a day to same destination.
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New T2 Office
I'll help with the maths, the shrinking of the business and its employee cost base will save £200m a year.
The shrinkage of the business & fleet will also shrink the revenue, so long as the revenue shrinkage doesn't exceed £140m then they'll break-even assuming a £60m loss this year.
Like most i think it would make sense to sell MAEL off, LGW slots are another matter, but if Davis favours a second runway at LGW the value may go up or down, but playing bucket & spades short haul LoCo against EZY & NAS will not be easy money at LGW however much the brand is cherished by the nation.
The shrinkage of the business & fleet will also shrink the revenue, so long as the revenue shrinkage doesn't exceed £140m then they'll break-even assuming a £60m loss this year.
Like most i think it would make sense to sell MAEL off, LGW slots are another matter, but if Davis favours a second runway at LGW the value may go up or down, but playing bucket & spades short haul LoCo against EZY & NAS will not be easy money at LGW however much the brand is cherished by the nation.
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Monarch has been taking on easy and Ryan on its core routes for 10 years and holding its own in a shift from charter to scheduled over that period that is already 90%+ complete. Now with a realigned cost base and unencumbered by the pension deficit the future looks much better than it potentially did last week.
Let's not pretend Greybull aren't in it to make money. Of course they are - any investor would be. But with the 737 MAX 8s being delivered between 2018 and 2020, in order to maximise the gain on their investment, 2020 or later looks like a far more likely exit point at which to float the airline. In the meantime the fleet will continue to modernise with new Airbus a/c continuing to arrive. Greybull will only be able to sell the airline on if it is a viable business, at which point hopefully the staff will see some payback from an IPO if that is what happens.
As for the maths, yes the revenue will be reduced by operating less aircraft, but the cost savings in staff pay, lease rates, and the various other compromise deals are very significant and now make Monarch a very lean single type operator from S15.
Let's not pretend Greybull aren't in it to make money. Of course they are - any investor would be. But with the 737 MAX 8s being delivered between 2018 and 2020, in order to maximise the gain on their investment, 2020 or later looks like a far more likely exit point at which to float the airline. In the meantime the fleet will continue to modernise with new Airbus a/c continuing to arrive. Greybull will only be able to sell the airline on if it is a viable business, at which point hopefully the staff will see some payback from an IPO if that is what happens.
As for the maths, yes the revenue will be reduced by operating less aircraft, but the cost savings in staff pay, lease rates, and the various other compromise deals are very significant and now make Monarch a very lean single type operator from S15.
Last edited by Rushed Approach; 26th Oct 2014 at 16:49.
Ut Sementem Feeceris
and now make Monarch a very lean single type operator from S15.
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Bestofficeintheworld.
Please. We have had enough of the doom and gloom on this thread. We can all speculate as to what could happen to
up Monarch from here. The Monarch guys have had a tough time for quite a while now and do not need any more negativity. Now it is time to be positive and hope that the new management mean what they say and have the skills to carry it off. They have an immediate PR hurdle to over come and some decent advertising might help.
Please. We have had enough of the doom and gloom on this thread. We can all speculate as to what could happen to
up Monarch from here. The Monarch guys have had a tough time for quite a while now and do not need any more negativity. Now it is time to be positive and hope that the new management mean what they say and have the skills to carry it off. They have an immediate PR hurdle to over come and some decent advertising might help.
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Bestofficeintheworld
This is my opinion based on my limited knowledge and a small amount of research based on my interest in Monarch, so I'm happy to be shot down but....
Comet - Greybull were a minority investor with no board representation, it was not Greybull, nor any of the final investors that caused its downfall, but the collapse of the Dixons merger. Creditors panicked causing a suffocation of cash flow. They were able to do that due to the significant stock assets at Comets disposal.
MAEL was indeed the most profitable arm of the monarch empire last year, however the fact that Monarch airlines was the largest contributor to that profit need not be underestimated. If you were a business family of let's say Swiss nationality but Italian descent and you owned an airline, an aircraft engineering company, a tour operator and various other travel related enterprises that all traded off each other, would you be tempted to move money between these companies in an efficient ( but legal ) manner so as to minimise your tax bill? How else could an airline survive for 48 years on next to no profit? Good will?
Airport slots - I am open to correction, but I believe airport slots cannot be sold between airlines. They can be returned to the airport authority and then auctioned off or sold as part of an airline sale. They may well be the companies most valuable asset but they are of no value to Greybull unless they flog the airline (which may well happen, but is not as bleak an outcome as what you have suggested)
737's - correct... I don't believe that an absolute firm order is in place, however the reported deal is worth £60m and the commitment from Greybull is around £125m so the theory doesn't add up.
Company cars - I don't get down to the LTN offices all that offices all that often, but from what I remember it hardly resembles the top gear car park. At the last check my base manager was driving a very nice but not over indulgent Ford Mondeo.
Not wholly innacurate, but most definitely doom mongering. There are massiv battles ahead, and significant sacrifices have been made, but Monarch are in a far better place than they were 3 months ago.
This is my opinion based on my limited knowledge and a small amount of research based on my interest in Monarch, so I'm happy to be shot down but....
Comet - Greybull were a minority investor with no board representation, it was not Greybull, nor any of the final investors that caused its downfall, but the collapse of the Dixons merger. Creditors panicked causing a suffocation of cash flow. They were able to do that due to the significant stock assets at Comets disposal.
MAEL was indeed the most profitable arm of the monarch empire last year, however the fact that Monarch airlines was the largest contributor to that profit need not be underestimated. If you were a business family of let's say Swiss nationality but Italian descent and you owned an airline, an aircraft engineering company, a tour operator and various other travel related enterprises that all traded off each other, would you be tempted to move money between these companies in an efficient ( but legal ) manner so as to minimise your tax bill? How else could an airline survive for 48 years on next to no profit? Good will?
Airport slots - I am open to correction, but I believe airport slots cannot be sold between airlines. They can be returned to the airport authority and then auctioned off or sold as part of an airline sale. They may well be the companies most valuable asset but they are of no value to Greybull unless they flog the airline (which may well happen, but is not as bleak an outcome as what you have suggested)
737's - correct... I don't believe that an absolute firm order is in place, however the reported deal is worth £60m and the commitment from Greybull is around £125m so the theory doesn't add up.
Company cars - I don't get down to the LTN offices all that offices all that often, but from what I remember it hardly resembles the top gear car park. At the last check my base manager was driving a very nice but not over indulgent Ford Mondeo.
Not wholly innacurate, but most definitely doom mongering. There are massiv battles ahead, and significant sacrifices have been made, but Monarch are in a far better place than they were 3 months ago.
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Bestofficeintheworld
Can you tell me how much Greybull injected into the three companies you quote?
Also, could you educate me on how Greybull could 'sell' Airport-operator owned landing slots?
Thanks
Can you tell me how much Greybull injected into the three companies you quote?
Also, could you educate me on how Greybull could 'sell' Airport-operator owned landing slots?
Thanks
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Slots only have value if they are scarce....of all the ones you have quoted only LGW can be classed in that category and even they are not that scarce...Easy bought 50 slot pairs from Flybe. Norwegian were still able to put two full aircrafts worth of flying in without buying any this summer. Max is quite correct in his assessment of MAELs "profitability". The same can be said for Cosmos.