Monarch Group is understood to be finalising its third recapitalisation in five years due to ongoing financial difficulties. Monarch has been failing to keep up with rivals easyJet and Ryanair in terms of sales, leaving the airline with no choice but to cut prices of its flights. Whilst easyJet and Ryanair are increasing their fleet size, Monarch is doing the complete opposite. Not only are they decreasing their fleet from 42 aeroplanes to 30, they are also cutting jobs, reducing wages by 30% and are minimising their routes and bases. Monarch has had a strong presence in the UK for many years, but it is struggling to compete against the more efficient low-cost airlines.
Monarch Airlines is owned by the wealthy Swiss Mantegazza family, led by Sergio Mantegazza. The family have been in control of Monarch Airlines for 46 years, since the airline’s first flight in 1968. The family have repeatedly bailed out the airline, reports state that the family have injected cash totalling to £120 million over the last five years. They injected £75 million into the business back in 2011, and a further £45 million two years prior. Monarch’s struggle is said to be due to being hit hard by the Arab Spring and high oil prices. However, the airline overcame this by a major restructuring which removed £52 million worth of costs. A large majority of cost savings came from improving fuel efficiency. At the end of last year the airline showed signs of recovery as it announced a return to profit. However, like many other airlines and travel companies business has been tough for Monarch.
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An investment fund called Greybull Capital sees a future for Monarch and is said to be the preferred bidder, which means that the Mantegazza family is likely to be handing the company over very soon depending on negotiations. The deal should be completed by the end of October but nothing has been finalised. The plan is to cut the charter and long-haul operations and concentrate on turning the airline into a scheduled no-fills carrier flying primarily to holiday destinations in the Canary Islands and the southern Mediterranean.Monarch employees have agreed to accept pay cuts of up to 30% as well as 900 redundancies which is believed to radically cut costs, keeping the business afloat. The staff had the decision of either accepting the pay cuts or risk going into administration. Monarch Airlines Gatwick flights will still be in operation but the airline announced that flights from East Midlands airport will terminate as of April 2015.
If you have experienced a flight delay of 2 hours 40 minutes or more flying with Monarch (or any other European airline) you could be entitled to flight delay compensation of up to 600 Euros. For non-European airlines, you would only qualify for compensation if the flight was departing an airport situated within the European Union. EC Regulation 261/2004 outlines these guidelines in detail. Contact Blueway Limited if you would like to claim compensation for a delay.