Posted on: 05 February 2015 by Mark Howells
After coming under the new ownership of Greybull Capital in October 2014, Monarch began a radical overhaul to remove £200 million in annual costs, which has led to the airline hitting all its revenue and cost targets in the first 100 days of trading under the new regime.
Monarch CEO, Andrew Swaffield, commented, “We are delivering a proper restructuring and turnaround of Monarch as we said we would. There is much to be done, but we now have a business with much lower costs, a solid platform for developing sustainable profitability and a clear strategic focus.”
The key elements of the restructuring so far have included cutting the Monarch fleet from 42 to 34 aircraft by revising agreements with aircraft lessors to include the return of 10 aircraft from the current fleet, alongside confirming an order for 30 new Boeing 737 MAX 8 aircraft (the first of these will be delivered in April 2018). Monarch expects these aircraft to save 15% in fuel consumption.
Elsewhere there was the formation of a new senior executive committee with Barry Nightingale recently appointed as the Group’s CFO, as well as the resolution of the Group’s pension deficit through agreement with the Pensions Regulator, with the Pension Protection Fund (PPF) taking a 10% stake in the business.
“The restructuring process was painful for everyone and I would like to say a big thank you to all of our colleagues who have remained focused on delivering great service to our customers throughout this period. Our aim is for all our people to share in the future success of the business. We must also acknowledge the support from our many industry partners, without whom the restructure would not have been possible,” Swaffield added.
These new changes will allow Monarch to implement a revised network focusing on scheduled European short-haul leisure destinations from five UK bases – London Gatwick, London Luton, Birmingham, Manchester and Leeds-Bradford – after stopping charter and long-haul flying with effect from summer 2015.
Monarch says it is on track to deliver double digit earnings this year and save around £20 million compared to previous winter losses.