Big Changes in Europe

Monarch Airlines entering administration ended nearly 50 years of operations by the UK carrier. This A320-200 (msn 5581) was one of around 50 A320 Family jets used by the airline during its history. As G-ZBAB, it was used by Monarch until 2015 and is now with Frontier Airlines as N229FR.
Nik French

There has been further upheaval in the European airline industry. Monarch Airlines ceased operations after entering administration, with passengers repatriated from across Europe and lessors starting the process of taking back the airline’s fleet of mainly Airbus A320 Family aircraft. Monarch had operated since 1968.

Factors in its demise included increased competition from the low-cost carriers on routes to its key markets in Spain and Portugal, with the additional capacity affecting yields. Reduced demand to Turkey and Greece caused by the weakening in the UK pound was another factor. The decline in currency value also led to rising operational costs, as its fuel and handling were paid in US dollars. Monarch Aircraft Engineering Ltd, which employs 750 staff at six UK and four overseas locations providing maintenance for various clients, operates as a standalone business and as such continues to trade.

Separate from Monarch, the Lufthansa Group was set to acquire aircraft and slots from Air Berlin, which declared insolvency in August. Administrators have been seeking to find buyers and as of mid- October Lufthansa was nearing a deal to buy some Air Berlin’s Niki subsidiary and some A320s.

The carve-up of Air Berlin and Monarch’s collapse are new European airline industry woes after Alitalia filed for bankruptcy earlier this year. Analysts quoted by the financial press say these events will cut excess capacity, easing pressure on yields and opening opportunities for other carriers to acquire slots.

Mark Broadbent