UK government to repatriate passengers after Monarch Airlines collapse

KPMG announced at 4am on Monday that Monarch, Britain’s longest-surviving airline brand, had been placed into administration

Monarch Airlines

The UK’s biggest peacetime repatriation is under way after the collapse of Monarch Airlines, with 110,000 customers to be brought home on specially chartered planes.

The accountants KPMG announced at 4am on Monday that Monarch, Britain’s longest-surviving airline brand, had been placed into administration and that all further flights from the UK had been cancelled and would not be rescheduled.

The Civil Aviation Authority said it had launched a programme to bring Monarch customers back to the UK over the next fortnight on 34 chartered planes.

All Monarch customers who were due to return to the UK in the next two weeks would be flown home at no extra cost and did not need to cut short their stay, the regulator said. However, 300,000 future bookings had been cancelled.

The CAA chief executive, Andrew Haines, said: “This is the biggest UK airline ever to cease trading, so the government has asked the CAA to support Monarch customers currently abroad to get back to the UK at the end of their holiday at no extra cost to them.

“We are putting together, at very short notice and for a period of two weeks, what is effectively one of the UK’s largest airlines to manage this task. We ask customers to bear with us as we work around the clock to bring everyone home.”

Haines said the CAA had been putting together contingency plans over the last four and a half weeks, but only had a “clear indication” that Monarch was about to go into administration late on Saturday night.

Speaking on BBC Radio 4’s Today programme, the CAA chair, Dame Deirdre Hutton, said no one was “stranded” abroad, but the news for people yet to travel with Monarch was not good.

“I’m conscious that people who have booked holidays will be distressed … I’m afraid the harsh message is that they must not go to the airport, there will not be a flight for them.”

Customers affected by the company’s collapse have been urged to check the dedicated website monarch.caa.co.uk for advice and information on flights back to the UK. It also provides information for passengers who have future bookings but are yet to leave the UK.

Haines said the CAA believed about 50% of Monarch customers would have full Atol protection, and most of the others should receive refunds on their flights through credit or debit card providers. However, customers who booked accommodation separately may struggle to reclaim money, with many travel insurers excluding airline failure from their policies.

Haines said it was a “very mixed picture” for the 300,000 customers yet to travel, but discussions were continuing in order to see if other holiday companies could take over the bookings.

The CAA said that passengers would be brought home on flights as close as possible to their original times, dates and destination, but some consolidation, disruption and delay was inevitable.

The 34 aircraft will be chartered from 16 different airlines, including Qatar Airways and easyJet, operating about 700 flights over the next two weeks. The biggest numbers will be through Spanish airports, starting with Alicante, along with Malaga, Palma Mallorca, Ibiza, Lanzarote and Tenerife, as well as Faro in Portugal.

Commenting on the “extraordinary operation”, the transport secretary, Chris Grayling, said: “This is a hugely distressing situation for British holidaymakers abroad – and my first priority is to help them get back to the UK. That is why I have immediately ordered the country’s biggest ever peacetime repatriation to fly about 110,000 passengers who could otherwise have been left stranded abroad.

“Nobody should underestimate the size of the challenge, so I ask passengers to be patient and act on the advice given by the CAA.”

Monarch, whose headquarters are at London Luton airport, was founded in 1968. It operates from four other UK bases – London Gatwick, Manchester, Birmingham and Leeds Bradford – travelling to more than 40 destinations around the world.

The company employs about 2,750 predominantly UK-based staff, its website stated. Monarch said it would work with the administrators, and the unions Balpa and Unite to help its employees find new jobs as quickly as possible.

Unite accused the government of “sitting on its hands” while Monarch went bust. The union, which represents about 1,800 engineers and cabin crew working for Monarch, said potential investors and buyers were deterred by the continuing uncertainty surrounding Brexit and whether British airlines could continue flights around Europe.

Unite said ministers had rebuffed requests by Monarch for a bridging loan of the kind the German government recently gave to prop up Air Berlin.

Oliver Richardson, a Unite national officer, said: “Monarch’s workforce has worked tirelessly and loyally, with great sacrifice, to try and turn the airline around in the last year.

“Their hard work has been undone by a government seemingly content to sit on its hands and allow one of the UK’s oldest airlines go into administration.”

Monarch enjoyed a good reputation for customer service but its long-term future rarely looked assured. In 2014, its Swiss family owners sold the company to the investment firm Greybull Capital, a deal that resulted in airline staff being forced to agree to pay cuts.

A Greybull spokesman said: “We are very sorry that we have not been able to turn around the Monarch Group, and for all the inconvenience and distress that this administration will cause customers, employees and the many people who are associated with Monarch.”

Greybull said the airline had been “buffeted by factors outside of its control”. Terrorism and the collapse of the pound after the Brexit vote were the two main factors, it said.

Two of Monarch’s biggest markets, in Egypt and Tunisia, were closed to tourists after terrorist attacks. The Foreign Office advised against travel to Tunisia and Egypt’s Red Sea resorts after the shooting in Sousse and the bombing of a Russian airliner in 2015, stopping charter flights from the UK.

Unrest in Turkey also badly hit Monarch’s holiday business. A resulting flood of seats across airlines to its core business in Spain and Portugal meant cheaper fares, which were unsustainable for Monarch.

The fall of the pound left Monarch paying £50m a year more for fuel and aircraft, purchased in dollars.

In a letter to staff, its chief executive, Andrew Swaffield, said the airline was carrying 14% more passengers than last year for £100m less revenue. He said the “root causes” of its declining revenue were terror attacks in Egypt and Tunisia and the decline of its Turkey business.

Its engineering arm, Monarch Aircraft Engineering, a joint venture with Boeing, continues to trade and is operating as normal.

The administrators said they were considering breaking up the company because no buyer had been found.

Blair Nimmo, of KPMG, said: “While there have been some expressions of interest, in reality no offers for the business as a whole have been forthcoming, so we now are looking for who might be interested in certain parts of business, whether it be physical assets or whether it be slots, ie routes that they currently operate.”

Courtesy: Guardian

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