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, 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.
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.
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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: