Passengers’ plans up in the air as Monarch Airlines faces fight for future
THOUSANDS of holidaymakers faced uncertainty last night as the UK’s fifthlargest airline was locked in emergency talks over its future.
Monarch Airlines, which recently reported huge financial losses, is fighting to renew an operating licence that enables it to offer package holidays. The firm was yesterday granted a oneday extension to its Air Travel Organiser’s Licence (ATOL) by the Civil Aviation Authority (CAA), which can stop a tour operator from selling holidays if it believes the company does not have enough cash to keep going.
The CAA said holidays booked today would be covered by ATOL protection, but that it would update the public on a daily basis. Hundreds of concerned customers yesterday took to social media to ask the airline about flights and were all informed by Monarch that they were going ahead as scheduled.
However, there are fears the company could collapse, leaving 100,000 customers stranded, and government ministers are understood to have discussed contingency plans. It is the third time in four years that the licence, which was due to expire at midnight, has been extended temporarily because of concerns over the company’s finances.
Last year, the airline needed a 12-day extension before its licence was renewed after an injection of £165 million from Greybull Capital, the majority shareholder. Boeing also contributed to that deal by allowing Monarch to enter into sale-and-leaseback arrangements for a fleet of new planes, which are expected to come into service next year.
Although Monarch’s package holiday trade amounts to just 5 per cent of
its overall business, it is feared the firm could go into administration within days if the licence is not renewed. Government ministers have reportedly been meeting to discuss contingency plans for if the airline does fail.
A source refused to comment on claims of cross-department meetings, but did not deny rumours that talks had been held in Cobra – the emergency briefing room.
The ATOL licence provides customers with protection when a licence holder fails. It guarantees they will receive a refund or be able to continue with their holiday and return home.
A CAA spokesman said: “The ATOL renewal process is ongoing and the CAA will conclude the processing of applications from approximately 1,300 ATOL holders in the next 24 hours.
“We can confirm that ATOL protection will remain available for eligible holiday bookings made with Monarch on Sunday.”
A spokesman for Monarch said: “As previously stated, we continue to work on plans to determine our optimal future shape, size and strategy. Our flights are operating as normal, carrying Monarch customers as scheduled.
“Our ATOL licence – for packaged holidays – is with the regulator. Flightonly bookings do not require an ATOL licence.”