Category Archives: Monarch Airlines

Greybull Capital finalizes its £165 million investment in Monarch Airlines

Monarch 737 MAX 8 (11)(Flt)(Boeing)(LR)

Monarch Airlines on October 12, 2016 announced the biggest investment in its 48 year history, a £165 million ($202.4 million) investment from its majority shareholder, Greybull Capital.

As a result of this investment Monarch has successfully renewed its ATOL licences from the CAA for the next 12 months and funded future growth plans.

In October 2014, Monarch announced an order for 30 Boeing 737 MAX 8 aircraft (above), with options for a further 15 planes. The first of these aircraft is due to be delivered in 2018.

The arrival of these state-of-the-art, fuel efficient aircraft in less than two years’ will enable Monarch to continue to provide passengers with a best in class inflight experience and allow the company to enjoy significant operational cost savings.

Andrew Swaffield, Chief Executive Officer of The Monarch Group, commented: “It is testament to the extensive effort by all parties, over the past weeks and months, that we are able to announce the largest investment in our 48-year history, as well as the renewal of our ATOL licences.

“I’d like to thank the CAA, our shareholders, partners, loyal customers and the team at Monarch for helping us to achieve this successful outcome. We are now firmly focused on the future as a stronger Monarch.”

Seabury Group LLC and Seabury Securities (UK) Ltd. served as financial advisor with respect to the recapitalisation.

Image: Boeing.

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Monarch to add five winter routes from London Gatwick and Manchester

Monarch Airlines (London-Luton) will add five winter routes starting in December from London (Gatwick) and Manchester. From LGW, the carrier will add seasonal service to Innsbruck (December 5), Geneva (December 12) and Salzburg (December 19). From MAN, the airline will add Geneva (December 19) and Lyon (December 20) with Airbus A320s and A321s per Airline Route.

Copyright Photo: Terry Wade/AirlinersGallery.com. Airbus A321-231 G-OZBT (msn 3546) completes its final approach to the runway at London (Gatwick).

Monarch Airlines aircraft slide show: AG Airline Slide Show

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Monarch Airlines reduces its six-month loss

Monarch Airlines (London-Luton) reported a loss of £69.9 million ($106.7 million) for the six months ending on April 30. This is an improvement of a loss of £110.6 million ($168.8 million) for the same half year period in 2014.

The airline issued this financial statement:

Monarch logo-1

Monarch, the European leisure airline group, has reported a half year loss of £69.9 million, down from £110.6 million for the same period last year. Winter losses, for the November to April period, were down by a bigger than forecast £40 million.

Monarch has completed the final phase of the restructuring program begun last year and has created a revitalized, entirely scheduled network of destinations for discerning leisure customers. The Monarch turnaround is firmly on track.

Monarch has undertaken a range of measures to remove £200 million in annual costs from the business, including restructuring of its network and fleet, improved revenue management and modernised working practices. £30 million of the reduction in winter losses is due to the success of this self-help turn around program, with the remaining £10 million due to additional savings in fuel costs.

Overall, this has resulted in a strong first half performance. The group is now focused on building on the heritage of the Monarch brand and creating a truly customer centric organisation.

Chief Executive Officer, Andrew Swaffield said; “We remain positive that the changes we have made to the structure of the group, the network and our cost base have set us in good stead to achieve the turnaround. It is thanks to the hard work of all 2,800 colleagues employed directly by the company, both on the ground and in the air, that we are focused on service and safety whilst maintaining a low cost base. These elements will help Monarch to build a sustainably profitable business.”

Chief Financial Officer, Barry Nightingale said; “Our winter performance was better than forecasted with substantially reduced losses.

“We have seen stable booking trends throughout the last 6 months and have seen good summer sales in key months which will help us to deliver against a challenging plan.

“Improved revenue management has played a key part in the turnaround results but, additionally we have put a lot of work into segmenting our customer groups and have been able to take a customer centric approach to reshape our network around increased frequencies to our most popular destinations. We have also added new scheduled routes taken from our portfolio of destinations previously served as charter routes to provide a better service and increased flexibility to customers.”

Earlier this year, Monarch launched a group wide employee bonus scheme to reward the commitment and hard work of all employees. Key performance indicators are aligned to company performance and the punctuality of the airline.

Andrew Swaffield said; “It’s clear that people who work for Monarch genuinely care about the company and our customers. That is directly reflected in the great service and natural warmth which comes as standard.

“The bonus scheme is designed to ensure that we focus on the right things such as company performance and airline punctuality (OTP). This year we have already improved, and our average OTP figure for the first six months is 83.2%, compared to 80% for the same period last year.”

Having recently celebrated 47 years of flying under the Monarch name, work has now begun to transition the airline to its new fleet of Boeing 737 MAX 8 aircraft (below) which will start coming into service in April 2018.

Monarch 737 MAX 8 (11)(Flt)(Boeing)(LR)

The airline confirmed this order in autumn 2014 to replace its current Airbus fleet by 2020. Each of the thirty new Boeing 737 MAX8 aircraft will deliver further savings on future fuel costs and contribute to the airline’s sustainable low cost base.

Alongside the scheduled airline operations, Monarch’s in-house engineering division has enjoyed growth in third party business and has opened a new maintenance base in Copenhagen. Monarch Aircraft Engineering was recently shortlisted for Maintenance, Repair & Overhaul company of the Year at this years’ industry Awards. The priority for this valuable group asset is to improve its efficiency and make a bigger contribution in the years to come.

Monarch’s tour operating business has seen strong year-on-year growth in on-line bookings, offsetting some category weakness in high street sales. Key markets in the Canaries and mainland Spain have grown in line with the airline’s scheduled operations to key city destinations. Packages to Egypt are seeing some recovery after an unsteady past two years. Greece continues to perform well, despite economic uncertainty and aggressive competition.

Video: CLICK HERE

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Monarch will replace its current Airbus fleet with new Boeing 737 MAX aircraft by 2020. Airbus A321-231 G-OZBE (msn 1707) arrives in Las Palmas.

Monarch Airlines aircraft slide show: AG Airline Slide Show

 

Monarch retires its last Airbus A330, becomes a completely scheduled airline

Monarch Airlines (London-Luton) officially retired its last Airbus A330 from revenue service on April 30. The last flight, operated by the pictured Airbus A330-243 G-EOMA (msn 265), was a short trip between the carrier’s two bases of London Gatwick and Birmingham and arrived to the signature water canon salute. Collectively, the A330 racked up over 30 million miles for the UK carrier. But as one door closes, another opens. The ending of A330 operations marked the beginning of a new age for Monarch, as it has completed it’s transition to a fully scheduled airline.

The airline said through it’s Facebook page on April 30:

Monarch logo-1

“Today the last remaining Airbus A330 in Monarch’s fleet operated its last flight for the airline, leaving the London Gatwick airport at 2.20 pm (1420) and landing at Birmingham Airport at 3.20 pm (1520).

This special day also marks a new chapter for us, as we become a completely scheduled airline.

We are very excited to see what the future holds and look forward to flying you to the best city and sun destinations in Europe!”

Report by Assistant Editor Oliver from Manchester.

Copyright Photo: Paul Denton/AirlinersGallery.com. G-EOMA lands at Geneva prior to the last flight.

Monarch Airlines aircraft slide show: AG Airline Slide Show

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Monarch Airlines retires its last three Boeing 757-200s

Monarch Airlines (London-Luton) as planned retired its last three Boeing 757-200s (G-DAJB, G-MONJ and G-MONK) this past week with the end of the summer season schedule.

The last flight was operated with G-MONK on a return charter flight from London (Gatwick) to
Krakow on November 12 as flights MON 9064 and MON 9065 returning late in the evening. G-MONK was then ferried from Gatwick Airport to Birmingham (BHX) for the end of lease checks.

All three of the Boeing 757s are currently at BHX awaiting their fate.

 

The airline is now all-Airbus ironically until those aircraft are replaced with new Boeing 737 MAX 8s.

Monarch has published this nice salute the venerable type on its Monarch blog:

Monarch has bid a sad but fond farewell to its Boeing 757s this month after years of tremendous service within the fleet. The Boeing 757 had a very interesting life within the fleet, due to it’s phenomenal flexibility and wide range and payload capabilities. It has served with Monarch all over the world and has probably seen more corners of the globe than our Airbus A300 or A330 wide body aircraft.

As word got out in the press and via social media that Monarch’s Boeing 757s were retiring, we received lots of interesting questions about the aircraft from you. In response, we’d like to share some of the beloved aircraft’s wonderful history and key stats with you. We’ve turned to passionate Boeing 757 enthusiast Toby Hiller, Monarch’s Senior Economic Planning Analyst, for his expertise.

Can you tell us a bit more about the history of the Boeing 757 fleet?

Between November 1993 and November 2014, Monarch’s Boeing 757 fleet operated planned flights to 439 airports in 128 countries and territories worldwide, including glamorous destinations such as New York, Rio de Janeiro, Cape Town, Bangkok, Tokyo, Singapore and Sydney! The furthest airport from Luton that the aircraft served was Auckland, New Zealand.

How many passenger seats/capacity does a Boeing 757 have?

With extra legroom seats the aircraft has 229 seats; without the extra legroom seats it has 235 seats. Interestingly, if the capacity is set up in a VIP “Captain’s Choice” configuration (which we operated on special charter flights – see below) then there is 92 business class seats and 12 economy seats.

Monarch 757-200 G-MONJ (02-Captain's Choice)(Grd)(Monarch)(LR)

Is there a fixed amount of staff needed for a Boeing 757?

The amount of crew needed for a Boeing 757 flight is subject to the length of the flight. A standard Monarch ZB short haul flight has 2 pilots (a captain and first officer) and 6 cabin crew serving our customers but this could change to 3 pilots and 8 cabin crew on long-range flights. It is interesting to know that VIP flights are subject to charterer requirements and on VIP flights an engineer would also travel.

How many toilets does a Monarch Boeing 757 have?

There are 2 toilets located at the front of the aircraft, 2 more at “door 3” which is further down the plane, so there are 4 in total.

How many galleys are there?

There are 2. There is a galley at the front of the aircraft and 1 at the rear. On VIP flights, a chef’s station could also be added to prepare fresh meals for customers.

What is the maximum take-off weight of the Boeing 757 aircraft?

Maximum take-off weight (MTOW): 113,398 kg

Top Copyright Photo: Antony J. Best/AirlinersGallery.com (all others by Monarch). One of the most colorful liveries worn by a Monarch 757 is the pictured Boeing 757-2T7 G-MONJ (msn 24104) that wore the the second version of the special “Hedkandi” color scheme.

Monarch Airlines aircraft slide show:

Video: A full flight on board G-DAJB from London (Gatwick) to Faro:

Monarch Airlines finalizes its deal with Boeing for 30 737 MAX 8s + 15 options

Monarch 737 MAX 8 (11)(Flt)(Boeing)(LR)

Monarch Airlines (London-Luton) and Boeing (Chicago and Seattle) today finalized an order for 30 737 MAX 8s worth more than $3.2 billion at current list prices. The order, originally announced at the Farnborough International Airshow in July when Monarch selected Boeing as its preferred bidder for fleet replacement, includes options for 15 additional 737 MAX 8s and marks the beginning of the British carrier’s transition to an all-Boeing single-aisle fleet.

The 737 MAX has accumulated 2,325 orders to date from 48 customers and is the fastest selling airplane in Boeing history.

Headquartered at London Luton Airport, but also operating from five other U.K. bases – London Gatwick, Manchester, Birmingham, East Midlands and Leeds-Bradford – Monarch predominantly serves holiday destinations around the Mediterranean and the Canary Islands as well as European ski resorts. Founded in 1968, the British carrier will move to a cost effective and uniform fleet of 737 MAX 8s within the next decade.

As previously reported, on October 24, Monarch Airlines and other parts of Monarch Holdings Limited, the UK’s leading independent leisure travel group, completed a restructuring program and sale of 90 percent of the group to Greybull Capital LLP under which it secured £125 million of permanent capital and liquidity facilities.

Image: Boeing.

Monarch Airlines: AG Slide Show

Greybull Capital finalizes its 90% acquisition of Monarch Airlines, will return 10 aircraft

Monarch Airlines (London-Luton) has a new ownership structure. Gerbil Capital LLP has finalized its acquisition yesterday (October 24) of the 90 percent of the stock of the airline. The airline issued this statement:

The Board of Monarch Holdings Limited (Monarch Airlines), is pleased to announce the completion of its strategic review and restructuring program under which it has secured ₤125 million of permanent capital and liquidity facilities provided by Greybull Capital LLP anchored by a ₤50 million capital commitment, with contributions from the Group’s prior shareholders, principally the Mantegazza family. Greybull also acquired 90% ownership interest in Monarch, with the remaining 10% passing to the Group’s defined pension scheme and ultimately the Pension Protection Fund (PPF).

The Civil Aviation Authority has renewed the Group’s ATOL licence.

Greybull is a family office that manages investments in private companies across a diversified range of industry sectors. Greybull will provide significant capital to Monarch in order to grow the Group and build on its long-established heritage and trusted brand name.

Under the leadership of new Chief Executive Andrew Swaffield, Monarch has undertaken a comprehensive strategic review of all areas of the business, from operations to ownership and financing. The aim of the review has been to create the optimum structure to realize the significant opportunity to build on Monarch’s respected brand and distinctive offer to its customers in the European scheduled leisure carrier market.

The main outcomes of Monarch’s strategic review and restructuring, which have led to the successful transaction with Greybull, are:

1. Optimize fleet from 42 to 34 aircraft, and revised agreements with lessors to either mark-to-market or early return of 10 aircraft from the current fleet

2. Securing a new Boeing fleet order for 30 737 MAX 8 aircraft with deliveries from 2018 to 2020, providing a cost-effective and uniform fleet by late 2020

3. Both long-haul and charter flying to end by April 2015

4. Airline network to specialize on Monarch’s ‘heartland’ of scheduled short-haul European leisure routes, with increased average frequencies, aircraft utilization, productivity and profitability

5. Focus on five UK airport bases – London Gatwick, Manchester, Birmingham, London Luton and Leeds-Bradford – and closure of East Midlands from summer 2015

6. Material concessions agreed with employees across the Group to enable the successful restructuring, including reductions in pay of up to 30%, with more than 90% of unionized staff voting to accept changes, and some 700 redundancies, two-thirds of which were voluntary
Reduction of the Group’s operating cost base, in line with other low-cost carriers, and increased efficiencies across the business
Resolution of the Group’s pension deficit through agreement with the Pensions Regulator, PPF and the Trustee of the Monarch Airlines

7. Limited Retirement Benefits Plan which will result in the Plan being assessed for entry into the PPF. The PPF would then hold a 10% stake in the Group, in line with its principles in restructurings such as this. The Pensions Regulator has cleared the restructuring. The pension deficit as per the company’s balance sheet was previously £158 million and the current estimated shortfall to secure full benefits is around £660 million.

Monarch Group CEO, Andrew Swaffield, said:

“I am delighted to welcome the Greybull team as the new owners of the Monarch Group. We have a shared vision for the strategic direction and prospects for the business, and I am looking forward to working with them to implement the exciting plans for building our future.”

“I would personally like to thank all Monarch employees who have been hugely supportive of the initiatives which were essential to complete this transaction. I am very proud to be leading such a team – together we will be building a great future for the Group.”

Commenting on behalf of the selling shareholders, Fabio Mantegazza said:

“We are very proud to have created one of the most loved aviation brands in the UK over the last 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future, with secure financial backing and clear strategic goals and we wish the Group every success.”

Said Greybull Partner Marc Meyohas:

“We are delighted to acquire Monarch and invest our capital into a very strong brand with great potential in all its markets and are grateful for the selling shareholders’ support in achieving this transaction. We see this as a long-term investment and hope we can be very supportive shareholders throughout Monarch’s next chapter.”

Advisers:

Seabury Securities (UK) Ltd., a unit of Seabury Group, acted as lead investment banker, along with co-adviser Dean Street Advisers, to the Monarch Group on the transaction with Greybull Capital LLP. Seabury Advisors LLC served as Monarch’s lead restructuring adviser and industrial consultant with respect to crafting the turnaround plan with Monarch’s management group. KPMG LLP and Short Partners LLP served as additional restructuring advisers. Freshfields Bruckhaus Deringer LLP and Bird and Bird LLP served as legal advisers to Monarch.

Greybull was advised by Zolfo Cooper LLP as financial adviser and Forsters LLP as legal counsel.

PricewaterhouseCoopers served as adviser to the selling shareholders.

In August 2014, Monarch confirmed it was undergoing a strategic review with the objective of determining the optimal structure to take the company forward. The Group sees a significant opportunity to build on the respected Monarch brand and distinctive customer offer, in order to create a focused and efficient scheduled European leisure carrier. Part of this strategy involves a major investment into its aircraft fleet. In July 2014, Monarch announced Boeing was the preferred bidder for its narrow-bodied fleet replacement, with 30 Boeing 737 MAX 8s for delivery from Q2 2018. At current list prices, this aircraft deal would be worth $3.1 billion. This transformational investment will enable Monarch to operate as efficiently as any European low-cost carrier.

As part of the strategic review, the Board of Monarch identified a number of cost-reduction initiatives that needed to be addressed in order to compete effectively in its chosen markets, specifically the scheduled European short-haul leisure market. With the strong support of all of Monarch’s stakeholders, including its employees, unions, third-party suppliers and regulators, a number of initiatives were set in motion and have been agreed to create a far stronger Group.

Greybull has private equity investments in various sectors including pharmaceuticals, semiconductors, energy, industrials, retail and leisure. It is a long-term active investor with significant or controlling stakes in all of its companies. Within its portfolio Greybull owns significant assets including:

Plessey Semiconductors Limited, where since 2010 Greybull has supported management’s plans to restructure and re-develop the company and has financed add-on acquisitions
New Era Petroleum Inc. Since 2010 Greybull has backed New Era with both working capital to develop its activities and capital to acquire and re-develop oil fields in the US
Arc Specialist Engineering Limited is a conglomerate of businesses in the steel industry. Greybull fully financed Arc and has been successfully trading the company since becoming its majority shareholder in 2013

Copyright Photo: Ton Jochems/AirlinersGallery.com. As part of the restructuring all long-haul routes are being dropped as the “new Monarch” focuses on its core UK Heartland cities with popular short-haul routes to sunny destinations. Monarch is retiring its last two Boeing 757-200s and likely the pictured Airbus A330-200s as the long-haul routes are dropped. The company will focus around the Airbus A320/A320 Family aircraft until the new Boeing 737 MAX 8s are delivered. Airbus A330-243 G-SMAN (msn 261) is pictured taxiing at Palma de Mallorca. Is a new livery coming under the new owners?

Monarch Airlines Aircraft Slide Show: