A holiday battleground in which Monarch just could not compete
The falling pound, terrorism and intense competition were all factors, says
While a hazy business strategy and the weak pound were no doubt contributing factors in the demise of Monarch, the changing nature of Europe’s holiday landscape created a battleground in which the 50-year-old carrier just could not compete.
Terror attacks in Turkey, along with the chaos born of a failed coup in July last year, and instability in Egypt and the closure to British airlines of the immensely popular Red Sea resort of Sharm el-Sheikh, hit two of Monarch’s key markets, with insolvency rumours beginning to surface last year after what was clearly a difficult summer.
It was in 2015 that the airline, which once prided itself on an upmarket offering that included free newspapers and four-course meals, dropped its long-haul and charter operations to places such as Mexico and Florida, and focused on the increasingly competitive European market.
Its scale made it difficult to compete against the budget big dogs – easyJet and Ryanair – in the best of times. Emerging from the recession in 2011, Monarch carried just under six million passengers; between them Ryanair and easyJet carried more than 131 million. But the carrier thought it might carve out enough of a slice of the short-haul pie to keep it afloat.
Then Turkey suffered attack after attack (16 in 2016 alone), all flights to Sharm el-Sheikh were grounded and Tunisia – the setting for another appalling terror attack – was put out of bounds by the Foreign Office. Holidaymakers turned to western Mediterranean countries. As the graphs above show, while Turkey, Egypt and Tunisia ia saw their arrivals tumble mble in 2016, Spain celebratedbrated a record year, welcoming 75.3 million visitors. As easyJetJet and Ryanair’s passenger numbers bers The graphs show Monarch’s shocking decline against its rivals and the fall in visits to its two main destinations continued to rise, Monarch’s slipped. The airline lost important routes to Egypt – Hurghada, Sharm and Luxor – as well as Monastir and Enfidha in Tunisia, while Spanish routes – Alicante, Malaga, Palma – became fiercely competitive. The importance of Egyptian holidays to Monarch’s coffers was underlined this week when the cross-party parliamentary group on the African nation released a statement warning that unless the ban on flights to Sharm el-Sheikh was lifted, more airlines would fail.
Meanwhile, Monarch competed on price against Ryanair, easyJet, Jet2 and others. It was too cut-throat to make up for the losses of revenue from its previously popular routes on the other side of the continent.
It is telling that the operation to rescue 110,000 holidaymakers when Monarch wheezed its final breath was focused primarily on SpanishS airports – Malaga, Alicante, LanzaroteLa and Palma. Now all that is left is for the carriers still servicing the Iberian PeninsulaPeninsu and its surroundingsurr islands to mop up M Monarch’s final fewfe passengers.