Pas­sen­gers’ plans up in the air as Monarch Air­lines faces fight for fu­ture

The Sunday Telegraph - - Front page - By Sian Har­ri­son

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.”

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