Yahoo Finance Monarch boss blames terror attacks for carrier's collapse
The boss of collapsed airline Monarch says the “root cause” of its demise can be traced back to terror attacks in Egypt and Tunisia.
Andrew Swaffield said Monarch was badly hit by the fallout from the 2015 bombing of a Russian airliner from Sharm el-Sheikh in Egypt and the mass shootings in Sousse, Tunisia later the same year.
An attempted coup in Turkey in 2016 – another key market for the carrier – further hit hopes of any recovery.
Despite carrying more passengers, said Swaffield, bosses were simply unable to balance the books.
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“The root cause is the closure, due to terrorism, of Sharm-El- Sheikh and Tunisia and the decimation of Turkey,” he said in a letter to staff.
“Since 2015, we’ve seen yields collapse by a quarter, resulting in £160m less revenue. This has especially affected Spain and Portugal which is 80% of our business.”
The chief executive described the news as “the update I hoped I would never have to write”, and said the firm went into administration “despite our best efforts”.
He said Monarch – the UK’s fifth largest airline – attempted to pivot “from short-haul to long-haul to reduce losses”, but was unable to find a “deliverable offer” from a buyer for its short-haul operations or assets.
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Mr Swaffield said he was “so sorry” for causing “huge inconvenience to customers”.
The airline officially went out of business at 4am on Monday – leaving some 110,000 passengers overseas.
It has come in for flak as it was still taking bookings over the weekend, despite the now obvious perilous state of the business. The collapse affects some 300,000 bookings and about 750,000 people.
The Civil Aviation Authority, the aero watchdog, is organising flights for all those stuck abroad to get home again – but only for the next two weeks.
Those abroad beyond that point will have to organise returns themselves. And those with bookings to fly from the UK on Monarch in the future will be able to apply for a refund through the Atol scheme, which refunds customers if a travel firm collapses.
Last year, Monarch carried 6.3 million passengers to 40 destinations from Gatwick, Luton, Birmingham, Leeds-Bradford and Manchester airports.
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The carrier posted a loss of £291m for the year to October 2016, compared with a profit of £27m for the previous 12 months, after revenues slumped in the wake of the terror attacks in Egypt and Tunisia, where 30 Britons were among the 38 holidaymakers shot dead.
It had been in last-ditch talks with the CAA about renewing its package holiday licence but failed to reach an agreement before the midnight Sunday deadline.
Blair Nimmo, from administrator KPMG, said its collapse was a result of “depressed prices” in the short haul travel market. The weak pound had also seen fuel and handling charges cost more, he said.
