The end of Monarch?

By | Category: Travel news

Image of a Monarch planeAt 4am this morning, Monarch Airlines went into administration. For those heading in the UK to the airport today or tomorrow, don’t bother as there will be no more flights. The Monarch website has been taken down and you will see a CAA page instead.

For the estimated 110,000 abroad then the CAA is in the process of chartering planes to bring those passengers home at the end of their holidays. For the 300,000 who are thought to have future bookings with the company then your holiday is cancelled. The first thing to do is to look at your holiday and flight documentation to see if you are ATOL protected. If you are, then you will receive a refund.

If you booked via your travel agency then contact them. You should check with your travel insurance policy to see if you are covered. If you aren’t but booked with a credit card then your credit card company will refund you your payment. If you booked with a debit card then you will become a creditor of the airline and only receive some money if any is found.

The CAA has set up a website ( www.monarch.caa.co.uk)) as well as a helpline which, the CAA says, has about 270 people at the end of phones to answer any queries. This number is 0300 303 2800 from the UK, and – if you are ringing from overseas – +44 1753 330330 from overseas. (Update: On Monday 2nd of October the website had two million hits making it difficult to access at some times of the day.)

Why has this come about?

As ever, there is no one reason. The chief executive, Andrew Swaffield, has blamed it on terrorism and this has been a contributing factor. Certainly there are more airline seats than passengers to fill them which is keeping airline prices low. Monarch was also hit by the downturn in holidays to Egypt, Tunisia and Turkey as it had put many of its efforts into the longer journeys within Europe. Terrorism has had its affect as people opted for perceived “safer destinations“ such as Spain, Portugal and Italy. It takes time for an airline to negotiate landing rights or increase the number of flights. With many airlines switching to the same destinations, competition intervenes and the same margins available on other flights are hit. The airline also decided that it would cease to be a charter one and concentrate on being a low-cost one. Its management weren’t trained in the same arts that easyJet, Ryanair and Wizz and it couldn’t really compete

A year ago, Monarch had worries and had to seek more funds from its backers. Then, I wondered whether people should book with an airline/tour operator that might collapse. The woes it had in 2016 extended into this year.  On Friday, the CAA extended its ATOL licence for 24 hours to enable the airline to seek a solution to its financial problems. Unfortunately it was unable to do so meaning, this morning, that 2,500-2,750 staff employed by the company have no job.

Today, the appointed administrators will start seeking buyers for the business. What will probably disappear is the name. No company wants to be associated with a company that collapses so the Monarch name will go.

Monarch Airlines operates from many regional airports as well as Gatwick to 33 overseas airports. It is the fifth largest airline so its demise is the biggest collapse in over twenty years. The CAA has chartered about thirty planes to bring people home making it –at least for the time being – one of the largest airlines in Europe. That it could charter so many planes so easily shows how many spare planes and capacity there is. This year alone, Alitalia and Air Berlin (who have a state funded bridging loan to keep flying) have both been placed in administration and Ryanair has taken over twenty planes out of service over the winter (a not unusual feature.)

The demise of Monarch will hit some airports hard. Luton and Birmingham have a strong Monarch presence but the airline also operated from Leeds/Bradford and Manchester as well as Gatwick.

What the collapse does demonstrate is the value of the ATOL system which protects many passengers in just this eventuality. The recommendation by Just about Travel is to seek an ATOL or bonded holiday supplier. If your holiday or flight isn’t covered in this way then pay by credit card (not debit card) because that 2-3% extra you might pay provides the “insurance“ for a refund if the tour operator/airline collapses.

At the end of the summer season, it is not unusual for a few tour operators to shut up shop as they face a long wait until the summer season when their incomes pick up. Will Monarch be the last collapse for this season? I fear not.

 

Tags: , , , , , ,