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Monarch in crisis talks to extend flying licence to package holidays Monarch in crisis talks to extend flying licence for package holidays
(35 minutes later)
Crisis talks between Monarch, aviation regulators and the company’s financial backers are under way in a last-ditch effort to extend the firm’s licence to fly package-holiday customers. Crisis talks between Monarch Airlines, aviation regulators and the company’s financial backers are under way in a last-ditch effort to extend the firm’s licence to fly package-holiday customers.
Monarch owner Greybull Capital is trying to put together a multimillion-pound funding package to prove to regulators the airline has the money to continue operating. Monarch’s owner, Greybull Capital, is trying to put together a multimillion-pound funding package to prove to regulators the airline has the money to continue operating.
The Luton-based firm – Britain’s oldest airline brand – has until midnight to show it can keep flying for three months, a condition attached to the award of the Air Travel Operators’ Licence (Atol). The Luton-based firm, which has been operating since 1968, has until midnight to show it can keep flying for three months, a condition attached to the award of the Air Travel Operators’ Licence (Atol).
An Atol offers passengers financial protection in the event an airline goes under, ensuring they are not marooned abroad. But Monarch could theoretically continue to carry passengers who have only booked a flight, even if it does not secure a deal on Friday. An Atol offers passengers financial protection in the event an airline goes under, ensuring they are not stranded abroad.
That’s because airlines are only required to offer Atol protection on package holidays, not on flight-only purchases. Theoretically, even if it does not secure a licence extension, Monarch could continue to carry passengers who have only booked a flight because airlines are only required to offer Atol protection on package holidays, not flight-only purchases.
One option could involve the Civil Aviation Authority granting a temporary extension to Monarch’s Atol, if it can show a funding package is on the verge of completion. One option could involve the Civil Aviation Authority granting a temporary extension to Monarch’s Atol, if it can show a funding package is near completion.
Marc Meyohas, one of the two brothers behind Greybull, a fund that specialises in buying distressed businesses, is understood to be personally involved in talks. Marc Meyohas, one of the two brothers behind Greybull, a fund that specialises in buying distressed businesses, is understood to be personally involved in talks. Monarch’s chief executive, Andrew Swaffield, representatives from the CAA and the airline’s law firm, Freshfields, are also part of the negotiations.
Monarch’s chief executive, Andrew Swaffield, representatives from the CAA and the airline’s law firm Freshfields are also around the negotiating table. Greybull has been trying to get funding from banks and other stakeholders to avoid having to shoulder the entire burden of any new funding for the airline, in which it holds a 90% stake.
Greybull has been trying to tap banks and other stakeholders to avoid having to shoulder the entire burden of any new funding for the airline, in which it holds a 90% stake. The CAA has granted a temporary stay of execution before: Monarch secured a three-week extension two years ago, when Greybull bought it from Switzerland’s Mantegazza family.
There is precedent for a temporary stay of execution from the CAA. Monarch secured a three-week extension two years ago, when Greybull bought it from Switzerland’s Mantegazza family.
Rumours that Monarch was on the verge of collapse surfaced last weekend, when planespotters noticed that a United Airlines plane had been put on standby to repatriate passengers on Monarch’s Mallorca-to-Manchester route.Rumours that Monarch was on the verge of collapse surfaced last weekend, when planespotters noticed that a United Airlines plane had been put on standby to repatriate passengers on Monarch’s Mallorca-to-Manchester route.
Monarch has said it is trading well but its stakeholders are discussing a significant investment to help it ride out difficult market conditions. Monarch has said it is trading well but that its stakeholders are discussing a significant investment to help it ride out difficult market conditions.
The wording suggests Greybull will not provide all the money and will seek support, possibly from Monarch’s banks or other potential investors.
The Chinese conglomerate HNA Group, which owns Hainan Airlines, has expressed interest in Monarch, which has blamed industry difficulties on terrorist attacks, the Brexit vote and the fall in the pound.The Chinese conglomerate HNA Group, which owns Hainan Airlines, has expressed interest in Monarch, which has blamed industry difficulties on terrorist attacks, the Brexit vote and the fall in the pound.
Monarch employs about 2,800 staff who took pay cuts of up to 30% and accepted hundreds of redundancies when a rescue deal with Greybull was agreed. Monarch’s 2,800 staff took pay cuts of up to 30% and accepted hundreds of redundancies when a rescue deal with Greybull was agreed.
The Pension Protection Fund owns the other 10% of the airline.The Pension Protection Fund owns the other 10% of the airline.