Hundreds of jobs axed as engineering arm fails

THE engineering arm of collapsed airline Monarch has fallen into administration, resulting in the loss of 450 jobs.

KPMG has been appointed to carry out the process after Monarch Aircraft Engineering, owned by private equity firm Greybull Capital, ran into financial difficulty.

The professional services firm said that the business was “unsustainable in its present form” following a restructuring in October that led customers to seek alternative suppliers.

David Pike, restructuring partner at KPMG, said: “Following the administration of other Monarch entities in 2017, MAEL sought to build its customer base to replace the loss of business from the former airline. Through the insolvency of the airline, however, the company inherited significant debts and claims. Every effort has been made to turn around the business, including launching a CVA which sought to resolve these legacy debts.

“Unfortunately, following the CVA, a number of customers reduced or sought to terminate their relationship with MAEL, further adversely impacting the business.”

Founded in 1967 and based at Luton Airport, MAE provides aircraft maintenance services across four main divisions: base maintenance, line maintenance, fleet technical support and a training academy.

Earlier this week, MAE said line maintenance operations at Gatwick, Birmingham, East Midlands, Newcastle and Glasgow Airports will be largely transferred to Morson Group, with the Luton Airport operations transferring to Storm Aviation.

Some Gatwick-based employees have transferred to Boeing.

Further operations at Manchester and Birmingham Airports, including related employees, were transferred to Flybe in November.

Collectively, those acquisitions safeguarded 182 jobs.

Airline Monarch, which was also owned by Greybull, collapsed in 2017, leading to 1,858 workers being made redundant and the flights and holidays of about 860,000 people being cancelled.

The engineering arm is the last remaining entity of the failed carrier.

KPMG is still seeking buyers for the fleet technical support division, which employs 27, and the training academy, which has 53 people on its books.

Mr Pike added: “While it is pleasing that agreements with a number of operators have been secured to ensure continuity of service at the majority of MAEL’s line maintenance stations, with only partial offers forthcoming for the rest of the business, the directors have taken the difficult step to appoint administrators.

“We will also be making every effort to provide support to those employees who have been affected by redundancy.”