More than 110,000 passengers are left stranded after Monarch Airlines ceased operations and around 2,100 employees lost their jobs.
Multiple reports claim that the airline has filed for bankruptcy earlier this week after 5 years in operations in the low-cost market.
The BBC reported that as many as 860,000 lost booking and it is unclear how this situation will be handled.
Forbes reported that the carrier announced the suspension of their flights and holidays via a tweet. Stranded passengers have been advised to refer to a resources page that includes terms of refunds and entitlements for those affected by the seizure.
The passengers’ situation is expected to be resolved soon as UK regulators dedicated more than 30 planes to help fly stranded passengers.
The announcement surprised many passengers who found out about the cancellation only as they arrived at the airport. The carrier is facing a strong wave of criticism due to claims of lack of support.
The company reported a total lost of £291m last year. According to company officials, the demise of the carrier is attributed to terror attacks in Turkey and Egypt, a weaker pound, and stronger competition.
According to BBC, Monarch – the UK’s fifth biggest and the country’s largest ever to collapse – was placed in administration at 04:00 BST – a time when the airline had no planes in the air.
Monarch Airlines is a British carrier with a history that dates back to June of 1967 and was considered to be the 5th largest airline in Britain. They operated regionally with flights from and to the Mediterranean, Canary Islands, Cyprus, Egypt, Greece, Sweden and Turkey.
Monarch had a steady increase in the number of passengers from 2011 to 2014. However, they exhibited a steep fall in the number of passengers from a little over 7,000,000 passengers in 2014 to a little over 5,700,000 passengers 2015. This fall continued in 2016 to below 5.5 million passengers.
In recent years, Greybull, which took control of Monarch in 2014, decided it would move away from long-haul holiday flights for some of its package holidays, according to BBC. This had a massive negative impact on the company and they couldn’t recover or return back to long haul flights.
Why they failed?
BBC Business reported several reasons that contributed to the fall of Monarch:
1. Fuel Prices
Falling revenue and Increasing fuel prices. The Brexit vote impacted the price of the Pound vs the US dollar.
2. Strong Competition
By entering the Low-Cost market, they had to put up with massive competition.
“They were trying to be a low-cost carrier – a bit like EasyJet or Wizz – but there just isn’t enough room for all of these airlines in the same market,” says Flight Global’s Mr Clark (BBC)
“There’s just too much competition… and Monarch wasn’t really offering anything new.”
Mr Clark points out that rivals such as Norwegian have moved faster.
3. Terror Attacks
Attacks in Egypt, Tunisia and Egypt contributed to the drying demand of the market.
4. Tickets Pricing
John Strickland of JLS Consulting says Monarch had to reduce prices for travel to its key markets.
“That’s meant with overcapacity prices have come down, which has only worsened the situation in terms of Monarch’s own revenues.”
According to reports, the company informed their staff via a premium conference service and the cost of the call was billed to the staff.
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