LONDON – Monarch Airlines, a struggling British low-cost carrier and tour operator, went bankrupt on Monday morning, ceasing flights and forcing the government to step in and bring back more than 100,000 stranded passengers overseas.
The British aviation regulator has called the Monarch collapse “the biggest failure of a British airline ever”. The airline is one of many who have struggled to tackle the highly competitive European air transport market.
This year alone, Italian carrier Alitalia went into administrative proceedings, which is similar to bankruptcy protection in the United States, and is currently looking for a buyer. Air Berlin, a German low-cost carrier, filed for bankruptcy and put its assets up for sale.
Ryanair, an Irish low-cost airline, has expressed interest in making a bid for Alitalia’s assets, but faced its own public backlash after being forced to cancel more than 1,000 flights in September and October due to errors in its management of pilot vacations. Last week, Ryanair announced it would cancel 18,000 additional flights on 34 routes between November and March to avoid further cancellations.
For Monarch, “increasing cost pressures and increasingly competitive market conditions in the European short-haul market” have led to “a prolonged period of business losses”, Blair Nimmo, partner at the accounting firm KPMG, who acts as a director of the company, said in a press release.
Monarch’s problems have been piling up for some time.
Terrorist attacks in Egypt and Tunisia and unrest in Turkey have reduced demand for tourism to these destinations, weighing on the carrier’s bottom line. This forced the airline to rely more on routes to popular vacation spots in southern Europe, such as Spain, where it faced stiff competition.
Monarch was founded in 1968 and operated flights to 40 destinations from Great Britain, as well as tour packages. It employed around 2,750 people, according to the company’s website.
Greybull Capital, a London-based investment firm, took a controlling stake in the airline in 2014 and was forced to inject capital into the carrier last year.
“We are truly sorry that we have not been able to turn the Monarch group back on track, and for all the inconvenience and distress this administration will cause to customers, employees and the many people associated with Monarch,” a Greybull spokesperson said on Monday. . .
In recent weeks, the airline had negotiated with the Civil Aviation Authority, a UK regulator, an extension of its air travel operator’s license, which it needed to continue selling vacation packages and operating flights.
Monarch’s abrupt collapse forced the Civil Aviation Authority to charter planes to help an estimated 110,000 stranded travelers overseas return to Britain. A spokesperson said the regulator plans to coordinate around 700 flights over the next two weeks. The first flights arrived early Monday.
In a statement, Chris Grayling, Britain’s transport secretary, described the effort as “the largest peacetime repatriation ever”.
“This is an unprecedented response to an unprecedented situation,” said Mr. Grayling.