Monarch Airlines, UK’s holiday carrier and fifth largest, has gone into administration after it failed to secure financial obligations for its future operations, accountants at KPMG announced in the early hours of Monday.
This is just as about 300,000 passengers were stranded due to cancellation of flights as they were told not to go to the airport.
The airlines, also known simply as Monarch, was a British charter and scheduled airline based at Luton, that operated scheduled flights for holiday travellers to destinations in the Mediterranean, Canary Islands, Cyprus, Egypt, Greece, Sweden and Turkey.
The airline travel Organizer license expired on Sept. 30 and was given a 24-hour extension but it was not renewed.
The owners, Greybull Capital, blamed the collapse on terrorist threats and fall of the pound after the Brexit. It also said that low consumer demand due to security concerns for traditionally strong sales in countries like Egypt and Turkey was another factor, which was out of its control.
With the collapse of the airline and cancellation of flights, which has left many tourists stranded, UK’s Civil Aviation Authority (CAA) has launched the biggest peacetime repatriation to bring over 110,000 people on holidays back to U.K. Repatriation flights are for all passengers who purchased tickets with Monarch irrespective of their nationality.
According to the Chief Executive of CAA, Monarch Airlines is the largest U.K airline to stop trading and the U.K government has asked the CAA to support Monarch Airlines to get their customers back to the U.K.
The regulators said customers do not need to cut their holiday short because it was making plans to secure a fleet of thirty air crafts to fly to thirty airports to bring back home stranded passengers.
The airline announced a loss of £291 million in October 2016, in comparison with a profit of £27 million in twelve months. The formerly owned Swiss airline began operations in 1967 and later sold to investment firm, Greybull Capital. It currently employed 2,750 people according to its website.
The unions, Balpa and Unite, are to help its employees find new jobs as quickly as possible. The unions accused the government of “sitting on its hands”, while Monarch collapsed.
Unite, a union which represents about 1,800 engineers and cabin crew working for Monarch, said potential investors and buyers were deterred by the continuing uncertainty surrounding Brexit and whether British airlines could continue flights around Europe.
Unite said ministers had rebuffed requests by Monarch for a bridging loan of the kind the German government recently gave to prop up Air Berlin.
The administrators said they were considering breaking up the company because no buyer had been found. Blair Nimmo of KPMG said that there have been some expressions of interest but in reality no offers have been forthcoming for the business as a whole. So now KMPG are looking for who might be interested in certain parts of business.
Worried Monarch customers have taken to social media to voice out their worries