Monarch still flying after last-minute licence extension

MONARCH Airlines has been granted a last-minute extension to its existing licence by the aviation authority just four hours before it was due to expire.

The stay of execution comes after days of talks between the troubled airline and the Civil Aviation Authority (CAA) over whether a new financing deal from its majority shareholder Greybull Capital would satisfy the regulator’s financial health check-list and secure the airline an Air Travel Operators’ Licence (Atol).

The CAA last night said it has grant- ed the airline an extension after its major shareholder provided extra funding to ensure that customers can be protected through the Atol scheme.

“Monarch now has 12 days to satisfy the CAA that the group is able to meet the requirements for a full Atol licence,” the CAA said.

In a separate statement Monarch added that on top of its fourth shareholder bailout in recent years it is poised to announce the “largest investment in its 48-year history”.

While Monarch is understood to be in talks with several potential backers, speculation about new finance has fo- cused on a possible deal with China’s fourth largest carrier Hainan, which expressed interest in Monarch over the summer. However, under European Union rules it would only be able to take a stake of up to 49pc of the airline.

The extension from the CAA comes as a relief to worried passengers who bombarded the airline’s customer services on social media channels yesterday with concerns over travel bookings.

All UK travel companies which sell holidays and flights are required to hold an Atol which protects its customers against being stranded if the airline goes bust. Without an Atol a company must immediately stop offering, booking or receiving payments.

Andrew Swaffield, chief executive of Monarch, last night welcomed the deal with the CAA, adding he was “excited about the additional capital coming into the group which will help us fund our future growth”.

Greybull Capital, the investment firm which this year also bought Tata Steel’s long-products division, hired bankers earlier this year to examine options for the airline. The turnaround specialist bought a 90pc stake in Monarch in 2014 when the founding Mantegazza family sold out.