Everything you need to know about the collapse of Monarch Airlines
Monarch, Britain’s longest-surviving airline brand, has gone into administration, leaving all flights grounded with 110,000 passengers abroad. The government has asked the Civil Aviation Authority to initiate a large repatriation operation but a further 300,000 customers with future bookings have had their flights and holiday plans cancelled.
What caused the crisis at Monarch and what should passengers expect now?
Are 110,000 passengers really stranded?
No. The government has made clear that all Monarch customers abroad will be repatriated, with about 700 flights to be specially chartered over the next fortnight, at no further cost,. But some may experience some disruption or amendments to their original travel plans.
What happens with Monarch Airlines now?
Monarch has gone into administration after failing to gain a renewal of its Air Travel Organiser’s Licence (Atol) from the Civil Aviation Authority. This meant it was no longer able to sell Atol-protected holidays from midnight on Monday and, accordingly, it announced it had appointed KPMG as liquidators. The CAA has taken over Monarch's website and the Department for Transport has set up two helplines: for passengers in the UK, 0300 303 2800; for passengers abroad, +44 1753 330 330.
What if I have booked a package holiday with Monarch?
If you bought a package holiday while the licence was still in – up until midnight on Sunday/Monday – you will be Atol-protected. That means if you are abroad, you will be put on an alternative flight home with another carrier. If you are in the UK, you will be entitled to a refund.
What if I have booked a flight only?
It is unlikely you will be Atol-protected. However, if you paid with a credit card and the cost was more than £100, the credit card company is liable and you can claim the money back.
How will I get home if I have a flight only with Monarch?
Passengers who are already abroad awaiting a Monarch flight home will be returned at no cost to them, by the government via one of more than 30 planes being chartered by the CAA.
What about people who booked a future flight or holiday? How do they get their money back or rebook?
There is no immediate substitute or process for rebooking; flights are simply cancelled.
If a holiday was booked through Monarch Holidays or another holiday firm or travel agent, it should be Atol protected and refundable. If a flight was booked direct with Monarch Airlines after 15 December 2016, it was not Atol protected.
However, the CAA believes most people should eventually be able to reclaim at least what they paid for their flight, through a section 75 or chargeback claim with their credit or debit card provider. But people who booked accommodation or car hire separately may struggle to recoup all costs depending on their payment method and insurance.
What role did Brexit play in Monarch’s failure?
Monarch had been struggling for years. It was kept aloft in 2014 through pay cuts and redundancies when taken over by the investment firm Greybull Capital, but the EU referendum and associated fall in the pound was a hammer blow. The decline in sterling left Monarch paying £50m a year more for its fuel and aircraft – airlines’ biggest costs, paid for in the international market in dollars. Sterling has fallen 10% against dollar since the referendum and more than 12% against the euro. Monarch had also placed an order for Boeing 737 Max planes worth more than $3bn, again to be paid for in dollars.
Monarch Airlines collapse: UK’s biggest peacetime repatriation under way
Civil Aviation Authority says it is taking action to get 110,000 people back to UK, with 300,000 future bookings cancelled
More broadly, British holidaymakers were deterred from travelling by the weak pound and fares fell. Uncertainty around Brexit, including fundamental questions over whether British carriers will still have the right to operate freely in Europe, is said to have deterred potential buyers from rescuing Monarch.
Was terrorism a major factor?
This was perhaps the biggest difficulty Monarch faced, with the carrier being above all a leisure airline operating routes to the sun. One of its most important markets was the Red Sea, but all travel to Sharm el-Sheikh, a year-round sun destination, was stopped after the 2015 bombing of a Russian Metrojet airliner. Monarch also had to stop operating services to Tunisia after the shootings at Sousse in 2015.
Monarch’s collapse follows the failure of Air Berlin and Alitalia, so will we see more airlines go bust?
The three carriers most likely to fail have now done so. But in general, industry observers have warned of too much capacity in the market: good news for passengers in the short term with lower fares, even for summer holiday flights, but unsustainable for many businesses. The pressure on airlines eased while the price of oil was low, but others may yet struggle.
What will happen to Monarch’s assets such as its planes and landing slots?
Administrators said there have been no realistic offers for the airline as a whole, but easyJet is believed to be interested in parts of it, especially landing slots that would allow it to offer more flights out of Gatwick and Luton. IAG, the owner of British Airways, and Wizz Air may also be interested in buying landing slots. Monarch’s leased planes are currently unable to fly due to the administration process.
Will Monarch leave a big hole in the holiday market and will prices rise as a result?
Prices may well rise, although Monarch, despite its longevity, remains a comparatively small player in the overall market. Competition concerns may exist over easyJet’s interest in some of the airline’s assets.