There are many reasons for airline collapse and 2018-2019 saw an unusually high number of airlines declare bankruptcy. Monarch, the low-cost airline headquartered at London Luton Airport, ceased its operations back in 2017. Let’s take a look back at its history and what led to its collapse.
Brains from a former airline
Bill Hodgson and Don Peacock were the heads behind Monarch. They had both previously been directors of the UK-based airline: British Eagle International Airlines.
British Eagle also had a base at Luton Airport and begun operations in 1948 with just five aircraft in its fleet. After 20 years in service, it went into liquidation, surrendering its 24 aircraft and ceasing its worldwide operations.
It was a defeat which didn’t stop Hodgson and Peacock creating an airline of their own.
They founded Monarch Airlines in June 1967, backed by entrepreneur Sergio Mantegazza, and created an airline that would take holidaymakers around the globe. Its routes included destinations in Europe, Asia, Africa, the US and the Caribbean.
Their plan of attack was unusual at the beginning. Their plan for a low-cost airline came at a time when flying was namely for the rich. According to the BBC, Bill’s daughter described the airline’s ideal customer as:
“The man who came home on a Friday and put money in a jam jar to save for a summer holiday.”
Take off right on schedule
Whilst its target market seemed, from the outset, to be unconventional, Monarch was just in time for the boom of the “package holiday”. It took off.
Starting with a fleet of just two planes, Monarch grew from strength to strength.
It moved with the times and when the independent holiday grew in popularity, Monarch listened to its customers. It started offering flights from Luton to Menorca which began in 1985.
But since it was no longer offering flights in an all-inclusive package, it entered another market: low-cost air travel.
Fight of the fares
With passengers preferring to make independent travel arrangements and easyJet cosying up to Monarch at London Luton at the start of 1995, the airline began its battle to become the most desired option in low-cost air travel.
It rebranded itself to move away from the family-orientated holiday to market the other destinations it offered.
It also started operating more services from other UK airports including Gatwick, Manchester and Birmingham in the 2000s. It managed to survive the 2008 financial crisis, but the pressure for low-cost airlines was mounting.
The struggle for low-cost carriers always comes with managing to sell enough add-ons to cover Air Passenger Duty. Naturally, this would have been a challenge Monarch had to face but in 2011, the Arab Spring sent fuel prices soaring. It was yet another blow. Mantegazza made his final investment before turning the company over to private investment firm Greybull Capital.
Whilst the £125m investment was an attempt to save Monarch, it could not account for the contextual issues that also inhibited it.
The airline made cuts on its long-haul routes, operating predominantly in Europe with fierce competition. But when terrorist attacks struck some of Monarch’s most popular destinations, like Egypt and Tunisia, the airline felt the pinch.
The competition became too much and with 35 aircraft left in its fleet, Monarch collapsed. On 2nd October 2017, it ceased operations and left 110,000 of its passengers stranded.
Other small carriers like Ryanair have since boomed and easyJet, the little competition Monarch once faced, is now one of the largest low-cost carriers and still battling it out to win passengers from its competition.
Were you affected by Monarch’s collapse? Would you like to see the airline still in operation? Let us know in the comments!