Monarch receive £75m from shareholders; announce £45m loss, restructuring and expansion
04.11.11
The Monarch Group has received a £75m cash injection from its shareholders and has announced a £45m loss plus a major restructuring, including a number of new scheduled routes. The Luton Airport based company is backed by the Swiss Mantegazza family, and this is the second time in two years that they have stepped in to refinance the group.
A Monarch spokesman said the deal has been agreed with the group’s shareholders ‘based on a business plan developed in response to the current high fuel price environment’. It will allow Monarch Airlines to develop its scheduled business and expand its fleet from 30 to 40 planes ‘over the medium term’.
For next summer the airline will add two additional Airbus A320 aircraft to its fleet, to be based at Birmingham Airport, and will launch 14 new routes from its bases at Gatwick, Luton, Manchester and Birmingham, taking its scheduled routes to 73. The move will see the airline expand its scheduled operations into Italy and Croatia with the aim of increasing its passenger numbers from 7 million to 10 million.
Announcing the restructuring, the group, which includes Monarch Airlines and tour operator Cosmos, confirmed a £45m loss in the year to October. It blamed the loss on ‘turbulent market conditions and high oil prices’ and forecast modest growth for 2012. It is putting a cost reduction programme in place ‘based on efficiencies and simplification of fleet operations in the airline’, including the retirement of a number of older planes.
The new routes are:
- Manchester: Dubrovnik, Milan, Venice and Verona.
- Birmingham: Dubrovnik, Heraklion, Milan, Rome and Venice.
- Gatwick: Dubrovnik, Heraklion, Milan and Venice
- Luton: Rome
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