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If MON make it through the winter of 2014 / 2015, I, for one, will be amazed !
All it'll take is a slight increase in fuel price and / or a downturn in passenger numbers and / or a hiccup in the world economy and / or a war a bit too close to home (go figure?!), and they'll be history (imho). What we're seeing here is almost exactly the same scenario as happened to Air Europe (AEU) in 1990 / 1991. I.e. with pretty much all of the aforementioned items occurring, in a desperate attempt to stave off costs through the forthcoming winter, AEU, in the autumn of 1990 initiated staff layoffs and swathing cuts in the flying program. They then managed to keep going up 'til the 8th March 1991, at which point the Receiver was called in, much as a result of the collapse of AEU's parent company (ILG).. and, ok, yes, there's a bit more to it than all that, but that's basically the gist of it. Imho, unless MON has incredibly deep cash reserves and / or access to a very generous line of credit, I rather suspect that this is going to be history repeating itself, I'm sad to say. :( |
Old King Coal
I really hope your off the mark in your predictions
I did read in one of the paper that administration was not an option for the private owners. I do however think your right that cash will pour out off the business this winter and with a planned? much smaller operation for next Summer then the opportunity to replenish will be diminished. The thing i just can't get my head round is why they announced an order for 30 new aircraft just week before this broke, i know its only an MOI but there must have been an awful lot of work put into evaluating the various suitors vying for their business...what changed in a matter of weeks? |
Monarch have had the support of a shareholder with deep pockets. If he is now not willing to keep plugging the gap, it's a very difficult situation.
If their game plan is to rival the loco s, I can't see it lasting long term. Time will tell but airlines in a difficult spot soon find hedging, leasing and bonding a nightmare. |
what changed in a matter of weeks? |
More specifically, the Chairman, who had been bull!!!!!ting the owner, got found out...
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Just a shame people who were calling this guy and his colleagues out several years ago got shouted down by those assuming billionaire owners meant job for life regardless of bums on seats or revenue generated. The rot started with Brown and sadly many people who have dealt with the senior management over the years have predicted just such an outcome as we see today. This is not an "I told you so" I really feel for those excellent staff who have been shafted. Highest paid director in the last accounts was £1m+ - go figure.
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It is looking grim. I agree with Old King Coal . I was at AE for 12 years and packing my US clothes for the first MD11 course. Instead I wound up on the New Joiners Course for Dole & Income Support. Many of us, like OKC will be reminded of our own experiences. Eagle, Court, Laker, Channel , Oh and glorious Invicta. I was the first candidate for their sponsored pilot training programme and told to wait three months for developments. They went bust and I carried on loading bags at LGW for BUA. Look, sad, sickening experiences and all of us wish better times for our Monarch colleagues. It is not the fall but the getting up that will see you all re-establishing yourselves quickly.
A painful reminder that as Commercial Pilots, we are licensed by our Regulatory Authorities to operate for hire/reward. Stay loyal to the licensing Authority and not to what is painted on the side of an aircraft. |
This is a serious situation that will rapidly deteriorate if new owners and their cash are not announced in due course.
Rest assured the staff will find out last what's really going on. |
No more charter?
Anyone have any ideas what drove Monarch's decision to abandon the charter market altogether? Are they struggling to compete with the array of cheap European charter carriers now operating out of the UK? It really does beggar belief that mis-management and personal ego's have allowed THE charter Airline of the UK to slip into this mess. Claiming that there is no money in the charter model, and failing to maintain old relationships or move in the correct circles to secure new business is the real failure here. Its obvious to see given the carriers operating in Monarch's back yard (a yard that they should have been controlling) that there is sound business still available in the UK which hasn't been exploited. Charter / ACMI contracts currently in UK/Eire (excludes the 2 Air Contractors pax aircraft): Norwegian 738 x 2 - Thomson Germania 737 - Thomson Germania A319 x 2 - mixed Privilege 757 - Jet 2 A320 (YL- registered) - Cooks TVS/Sunwing 738 - Cooks Fly Dubai 738 x 3 - Ryanair Air Explore 734 x 2 - Ryanair Estonian E170 - mixed Small Planet A320 - mixed Titan A320 - EZY Titan 757 - EZY There 17 contracts above, 12 Aircraft to leave the fleet... surely someone should have been securing some of the above? It sadens me that its come to this and wish all those that are being sold down the river the very best. I've heard the revised T&C's are severe to say the very least. |
Usual upbeat message being trotted out by PPRuNe then! The doom-mongers hard at work as usual.
The fact is that Monarch has needed an unencumbered makeover to bring it properly into the 21st century for years. Seabury are in and see huge potential, as do several serious investors. Come November, the changes will start. Come next May, the airline will be transformed. |
At the expense of how many jobs though RA?!
People are in receipt of "at risk" letters now, I'm afraid redundancies will happen! |
Change sometimes has to be painful. But there are many jobs out there and Monarch will do all it can with all of its excellent links within the industry to secure these opportunities for those pilots that must unfortunately leave for now, with an open door to come back with seniority if they wish in years to come.
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Rushed approach, nice thought but unfortunately unlikely. We have had a lot of info that anybody could find in 10 mins in the Internet regarding jobs. Unlike TC and contacts/jobs with EK, we have a couple of email addresses at various airlines to send a cv.....as for returning on seniority that's not quite the reality. We may be able to come back, seniority hasn't been mentioned and to be honest whont really matter as we are about to have our T's and C's put in the bin....
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Which email addresses have Monarch provided their excellent team with? One would hope that BA, easyJet, Jet2, DHL and Thomas Cook would all be able to find positions for the unlucky ones who will be seeking employment.
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Seabury probably see huge potential for fees for themselves, as they are advisers rather than investors.
Monarch appear to have chosen to be become a smaller loco . The culture change required alone will be too much. |
RA - you yourself couldn't see this coming
This is simply press speculation from a newspaper that really ought to know better (it's that time of year). Swiss billionaires aren't in the habit of throwing good money after bad - that's why they remain Swiss billionaires that have increased their wealth over recent years, despite the "recession". In reality, they are playing a long game and will back loans to companies in their portfolio that have served them well and will do so again in the future. An airline's profit is but one element in the big picture. The shareholders buy and then lease aircraft that they own to the Company and are thus having their aircraft bought from the lease costs. Once these aircraft are paid for (after say 10 years) they make a substantial profit for the shareholder (not the company) for another 10 or more years, analogous to buying a buy-to-let house and having the tenants buy it for you in 10 years via their rent and therefter you enjoy another 10 years with no mortgage payments. Unfortunately aircraft tend to last not much longer than 20 or so years, unlike houses. The point is that Monarch does not need to make money to be of value to the shareholders - why do you think it has NEVER made a substantial profit of more than £10m, despite a £700+m turnover in recent years, in over 40 years of trading? |
Just as an interesting aside...
The recent, and surprising to most, decision to go with the b737 order.... Is this order still in place. If so it may give some insight into the future of Monarch. Also is it possible the change of commercial direction was known before the aircraft order was made? |
An order was never made. "Preferred bidder" was as far as it went.
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Financial rhetoric ... Backfired slightly.
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We'll see.
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