Monarch in turbulence
 

It is public that Monarch are requiring investment, and it could be coming in the form of turn-around money.

This is going to mean change, and it's not going to be for the good.

Decades ago I was attempting to find out who actually owned Monarch (companies House in London-that's how we did it in those days) but drew a blank. Assistant suggested that whenever the company needed money, some Gnome in Switzerland coughed up. Is it still the same ?

The gnome's not coughing now.

Galley FM has suggested they have pulled out of a EMA for next summer. Can anyone confirm this?

Careful maxed-out, that could be construed as libel.

Well, I hope you all have bloody good lawyers.

Its a family that lives in Switzerland who has a lot of money and a rather Italian sounding name. Oh, and Monarch has a capital M, which of course stands for Mmmm..onarch!

Watch your back son; you are a marked man.

Sergio Mantegazza:
Sergio Mantegazza - Forbes

Telegraph Article
 

There was a comparable article in the Sunday Times yesterday which was much more upbeat than the DTs scaremongering but it exists behind a paywall.

Are the swiss owners looking at exiting or no longer investing their money in the company going forward? Hence looking for outside investment...

Monarch Airlines looking at dramatic overhaul - eTurboNews.com




LONDON, England - Monarch is looking at a dramatic overhaul of its operations, potentially taking an axe to routes and retreating from bases, as several distressed investors, including Jon Moulton, circle the travel group.

New chairman Sir Roy McNulty and chief executive Andrew Swaffield are scrutinising every part of the company’s operations as part of a sweeping strategic review, which is expected to lead to significant changes in the ownership structure.

The group on Sunday confirmed that it is reviewing “all areas of the business from operations to ownership and financing” after The Sunday Telegraph revealed that a number of distressed and private equity investors, including venture capitalist Jon Moulton’s Better Capital, HIG Europe, Towerbrook and Indigo Capital, are considering injecting cash into the company, which is controlled by the Swiss billionaire Mantegazza family.

Monarch is understood to need as much as £60m of fresh capital, despite the Mantegazzas pumping £120m into the group since 2009.


Dean Street Advisers is leading the search for an external investor but the Mantegazzas have also appointed restructuring specialists from PwC, who are working on a rescue plan in case Monarch is unable to strike a deal to bring in fresh capital.

Monarch said in a statement: “The group confirms it is undergoing a strategic review under the leadership of new non-executive chairman Sir Roy McNulty and chief executive Andrew Swaffield. The review covers all areas of the business from operations to ownership and financing, with the objective of determining the optimum structure to realise the significant opportunity to build on the respected Monarch brand and distinctive offer to its customers in the budget airline market.”

The "Airliner World Readers" forum seem clued up on S15 released programme compared to this year! Look like LBA under threat and reduced MAN operation!

A great British airline, good luck to all!

Calling in 'consultants' of this type is generally the kiss of death for an airline. I've seen it with several.

I hope Monarch can find a way to survive, a good airline overall but they seem to have crew and/or a/c availability problems a lot of the time, affecting their reliability.

Carefull now JB007.

JW411 might get the hump with you too. He might even tell you to watch your back and that you're a marked man!

Monarch have had teams of consultants crawling over the airline for the last 3 years. Maybe that's where the money's gone!!

Some people in higher management with appropriate knowledge and experience saves a lot of £££/$$$/€€€

Usually appropriate insider knowledge is invaluable in such cases.
Saving can be made using knowledge of where saving are possible, not from a balance sheet seen by an accountant.

I can't see Monarch being able to compete with the low cost incumbents. They have neither the economy of scale nor the financial reserves of the two major UK players. I cannot see either of the to major low cost carriers being willing to cede territory or market share to Monarch. It sounds to me like a risky strategy.

Monarch have had a great run . I wish Dan had had this sort of backing when we needed it . How many airlines in UK have come and gone since 1985 ?

There will be major changes at Monarch, and it won't be for the better for the (excellent) crew.

I wouldn't bet on it still being independent in 5 years time.

Monarch to exit the charter market in 2015
 

Not sure if this aspect of their strategic review was common knowledge yet. Also not sure how this might impact the "terms and endearment" or hiring:

Monarch Airlines to exit charter market in Spring 2015 - ch-aviation.com

Good luck to all!

Clamchowder
 

I think 'going under' is very unlikely, my personal view is that the owners have had enough, i think an equity partner is unlikely and a trade buyer even less so given what are likely to be generous pension & conditions which would have to be respected.

I think a visit from the suits will recommend selling of the engineering arm, for which i suspect there will be a market, maybe also Cosmos,

Comparisons with Flybe's alleged revival don't add up, they are a public company that over stretched themselves with bases and aircraft orders, but operate in a totally different market, the question is what do Monarch have to offer that you can't get from the likes of Jet2, easy, Ryanair, Norwegian? its loyal customer base is old and not web literate

Yes, but that's where the disposable money is

Pensioner income growth outstrips inflation | The Actuary, official magazine of SIAS and The Actuarial Profession

Rushed approach
 

Try telling Granny that outside of London !! in any event they are more likely to book a package holiday rather than a DIY one and Monarch is chasing after the same market as the rest of the bucket & spade brigade

Hopefully the new management know what they are doing, but it beggars believe that they could spend 9 months debating over Boeing/Airbus/C series then announce an order for aircraft they can't finance and two weeks later announce they are closing EMA & possibly LBA to take on Ryanair & EasyJet and according to PPJN have just upped pilots salaries by above inflation increase.:confused::confused:

Mr M
 

The question is why should a tight billionaire octogenerian give a monkey's about a crumbling airline?
Now, let me tell you something: ZB has been sold to F7.
Yes, you see the Swiss connection there?
Voilà!

LNIDA, you're obviously looking at a different PPJN Monarch page to the one I've just checked then, which still shows the 2013 pay scales. There will be no above RPI rise for pilots this year no matter what PPJN might say. You obviously have no idea about how this airline makes its money - the airline itself doesn't necessarily have to buy the jets!

Winerhofer, because he has done so for the past 46 years and the jets all have his initial on their tails.

This company has never made a large profit but then that was never the point. The basic premise has been that the family buy the aircraft and lease them to the airline. The airline operates them and pays a lease back to the owner. This lease amount has been paid continually long after the aircraft have been paid for. You do not become worth $5 bn without some clever business practice. This all worked well before the advent of low cost carriers and a family holiday company would buy the seats on the aircraft to keep them busy.
The company's financial affairs have always been a closely guarded secret but there are only three principal shareholders to answer to which is very unusual in this industry.
The events of recent years including the banking crisis has made financing the aircraft more difficult and the rise of low cost has also made it more difficult to fill the aircraft seats. I cannot imagine that the senior members of the family will allow the company which has made them phenomenally rich to fold but I worry about the younger generations who have always been in a family of billionaires and their commitment to the group. Perhaps they need to be taught the same lesson that Warren Buffet taught his three children when he disinherited them and they will have to earn their own money.

That's a myth. Buffet will be handing down plenty of money to his kids, just not the whole lot. He's said he wants them to have enough money that they feel they can do anything but not too much that they will do nothing. They're not going to starve and compared to us they will still be fabulously wealthy. Anyway back to the topic....

17-Aug-2014
 

Monarch airline axes 1,000 jobs in attempt to lure saviour
MONARCH AIRLINES is to cut more than 1,000 jobs — about one-third of its staff — as part of a drastic overhaul to cut losses and woo new investors.
All charter and long-haul flights will be axed, and the aircraft fleet shrunk from 42 to 30.
The drastic plan has been drawn up by new chief executive Andrew Swaffield in an effort to restore the airline to profitability. Internal projections show the carrier is likely to lose about £60m this year.
The specialist American aviation advisory firm Seabury Capital is leading the hunt for new investors, with about a dozen financial players — private equity and other investment funds — in the frame.
One obstacle is Monarch’s pension black hole. A defined benefit scheme, closed to new members more than a decade ago, it still has a deficit of £158m. Talks have begun with trustees and the pensions regulator about a solution.
The 47-year-old airline is a stalwart of the British holiday scene, carrying 6m passengers a year to destinations in the Mediterranean.
It is headquartered at Luton airport and with its aircraft maintenance division and Cosmos tour-operator arm has 3,300 employees.
It is owned by Switzerland’s billionaire Mantegazza family.
The Mantegazzas, who have regularly injected cash in recent years to make good losses, have accountant PwC standing by to take charge if a new investor is not found. Swaffield was recruited from British Airways’ parent company IAG to run the airline in April.
He was promoted to chief executive of Monarch Group in July after the abrupt departure of executive chairman Iain Rawlinson.
Monarch declined to comment yesterday, but potential investors have been given an outline of Swaffield’s plan.
He will ditch Monarch’s historic “hybrid” model, which saw it mix charter flying — one-off flights for tour operators — with scheduled services.
Charter flights will end and the company will become a budget carrier operating only scheduled flights.
Large cost cuts, to bring the airline’s overheads in line with those of big rival easyJet, are to be announced in the next few months.
Last week the airline said it would shut its base at East Midlands airport, and the base at Leeds/Bradford is also under review.
Swaffield and chairman Sir Roy McNulty — the Northern Irish businessman who has chaired the Civil Aviation Authority — hope to find new investors by Christmas.
It is understood the Mantegazzas would be prepared to relinquish control if the right deal can be found.
The management are pursuing a “solvent” sale — they do not want to put the company into administration to ditch legacy costs, including the pension scheme.
Dean Street, a City investment banking boutique, is helping in the hunt for new funds, and KPMG, the accountant, has prepared an information pack for investors.
Industry experts say that, while the cost cuts are promising, Monarch will still struggle to compete against easyJet and Ryanair, the two titans of the low-cost airline world.

Good luck to everyone at Monarch. Went through something similar at Flybe last year and it's not pleasant.

Merge Or Submerge!
 

There'll be an LCC cull.
EK,EY and QR are waiting in the wings and EY has already stolen the march.

AlexanderDeMeerkat - you should have ended your post after the first sentence. Thinly disguised easyjet banner waving is not appropriate in the context of people losing their jobs - shame on you. I hope you never face redundancy in a job which your family depends upon the income - it is not a nice place to be and certainly isn't an issue to point score on. Perhaps you would consider editing your post to remove your glib dig and replace it with something more thoughtful and mature.

Whilst Meerkats comments lack tact, his observation is correct. I have witnessed several colleagues do the same, for all the right reasoning, over the last 24 months. What seemed a golden opportunity then is beginning to look like a poison chalice. Good luck to those at the bottom of the seniority list.

The vast majority of pilots that move to Monarch from easy are FlexiCrew F/Os. To my knowledge only a handful of pilots (if that) has ever moved from Monarch to easyJet.

The conclusion must surely be that, other than for FlexiCrew, each respective group within the two companies on permanent contracts must be reasonably happy with their lot? They are both good companies to work for.

By the way, despite the press continually getting this wrong, Monarch has been a mostly scheduled carrier for the last 10+ years and is simply completing the transition to fully scheduled flying. During that period it has competed very successfully with easy and Ryan on its core routes, and there is absolutely no reason why it cannot continue to do so in the future, particularly with the order for 30 new aircraft.

ADM, you just went down in my opinion. To -1.

Rushed approach
 

You imply in your response to LNIDA that the M family have made huge amounts of money by leasing aircraft to Monarch and thereby transferring profits from an operating airline in the UK to a leasing company in Switzerland, all perfectly legally, but surely the problem with that is you lose sight of what the business is about in much the same way that bmi became a slot sitter at LHR for Bishop's exit plan,rather than a focused airline.

Ditto the engineering at MAEL in exactly the same way that bmi used bmi engineering, in good times its a good way of moving money around, but in lean times incestuous relationships breed poor business decisions.

Given the time and money this can be turnaround, moving to a one size fleet is a good start and dumping long haul makes sense, they need to make the likes of BHX/LTN/MAN their home turf

I don't disagree with most of that, although would add LGW as the obvious omission from your list, albeit that competition there is, as ever, challenging.

FLB, British Midland was always about Sir Michael's exit plan. Quite simply it was his train set and the strategy was to facilitate him going out the door with the largest amount possible. In that sense it was a very focussed airline!