Monarch Airlines, the UK’s fifth largest airline, has gone into administration, becoming the largest British airline to go bust. Administrators from KPMG were appointed Monday morning, they commented all their flights and future holidays booked with Monarch Travel Group have been cancelled. The collapse has left 110,000 customers stranded overseas, with most passengers left in the Costa del Sol region of Southern Spain, according to Civil Aviation Authority chief executive Andrew Haines.
Monarch flies to approximately 40 destinations from five UK airports and employs around 2,100 employees. 300,000 future bookings have been cancelled with Monarch. The company posted a loss of £291.1 million in 2016. “This has been part of the issue,” Mr Haines commented. “With terrorism in the Middle East and [issues in] the eastern Mediterranean, they’ve been part of a very intense price war in a very congested market in the western Mediterranean.”
Mr Haines’ remarks indicate the causes for Monarch Airlines’ administration. More than 30 planes are to be sent by the Civil Aviation Authority to return the stranded customers. KPMG’s Blair Nimmo remarked several causes to Monarch problems that “can be summed up very succinctly: Falling revenues and rising costs.”
Since the Brexit vote the pound Sterling has fallen near to 10% against the US dollar. From this, the airline has to pay more to buy its fuel. (Interestingly, this is amid oil prices falling below $56 following a rise in US drilling and a higher OPEC output.)
Furthermore, Monarch’s main market is the Spanish market, which is fiercely competitive following rivals setting up more flights and holidays there. This is a consequence of a pattern of tourism, many are moving away from the eastern Mediterranean, accordingly, due to the European migrant crisis.