The Strategist

Bankruptcy of UK Monarch Airlines may affect 110 thousand British tourists

10/03/2017 - 14:32

Yesterday, British travel company Monarch Airlines announced its bankruptcy, which has become the biggest crash among British airlines in recent years. The company’s problems can affect the 110 thousand British tourists who are now at various resorts. The government is already taking measures to return people. The bankruptcy of Monarch Airlines has already become the third bankruptcy of the airline in Western Europe in this year. Earlier, Alitalia and AirBerlin issued the same statements.

Pedro Aragão
Pedro Aragão
Yesterday’s morning, British tour operator Monarch Travel Group Limited and Monarch Airlines Limited were transferred under external management with the immediate cancellation of all tours and flights. This was stated by the audit company KPMG, which became the external manager of the bankrupt tour operator and airline. Auditors recommend that clients of companies do not go to airports and wait for a special notice about how they will be taken out of the resorts. KPMG explained the bankruptcy of Monarch Airllines by "the accumulated spending and growing competition in the European market for short-haul flights, which is why Monarch Group has experienced operational losses for some time." Currently, external managers are working closely with the UK government and the Civil Aviation Authority (CAA) aviation regulator to organize flights that can take British tourists out. KPMG estimates the number of affected Monarch clients at 110 thousand people.

The British media have called Monarch Air’s bankruptcy one of the biggest bankruptcies in the British sector of passenger air travel lately. The company served about 40 destinations and flew from five British hubs - Gatwick, Birmingham, Manchester, Leeds and Luton. The company also canceled about 300 thousand future bookings. According to KPMG, the annual turnover of the company is about 200 thousand people. The company employs 2.1 thousand people. Monarch's management has already brought its deepest apologies to customers and acknowledged its management mistakes. According to the CAA, about 30 aircraft have already been allocated for the export of tourists. British Transport Minister Chris Grayling said that "this is an extremely unpleasant situation, and now our main task is to take out people and help them return to the UK." Experts note that against the backdrop of the competition that has inflamed after the fall of oil prices, this is the third bankruptcy of a major airline in Western Europe this year - German AirBerlin and Italian Alitalia started their bankruptcies earlier.

However, the British trade unions have assigned part of the emergency situation around the bankruptcy of Monarch to the British authorities. Unite’s representatives noted that if the ministers from the government of Theresa May "did not sit idle" and provided Monarch with state aid on time, as the German authorities did in the case of AirBerlin, the current situation would not be so urgent.