Monarch Airlines bankrupts, leaving 110 000 passengers abroad

British budget carrier Monarch Airlines has declared bankruptcy and halted operations, leaving up to 110,000 passengers stranded abroad after all flights and vacations were canceled.

The company entered administration on Monday, in what is being described as the U.K.’s biggest-ever airline collapse, after struggling to keep going amid a price war.

“Mounting cost pressures and increasingly competitive market conditions in the European short-haul market have contributed to the Monarch Group experiencing a sustained period of trading losses,” the carriers’ accountants KMPG said in a statement.

The U.K.’s Civil Aviation Authority has launched a program to bring stranded travelers home on new flights. This covers those overseas now and due to fly back before Oct. 15, an estimated 110,000 people.

“This is the biggest U.K. airline ever to cease trading, so the government has asked the CAA to support Monarch customers currently abroad to get back to the U.K. at the end of their holiday at no extra cost to them,” said Andrew Haines, the chief executive of the CAA.

But those yet to take a trip have been told not to go to the airport, as all 300,000 future bookings have been canceled. Those who bought before Dec. 14, 2016 can make a claim for compensation under the ATOL industry financial protection scheme for consumers in the U.K. People who booked after that cannot lodge a claim.

Monarch, whose headquarters are at London Luton airport, was founded in 1968. It operates from four other UK bases – London Gatwick, Manchester, Birmingham and Leeds Bradford – travelling to more than 40 destinations around the world.

The company employs about 2,750 predominantly UK-based staff, its website stated. Monarch said it would work with the administrators and the unions Balpa and Unite to help its employees find new jobs as quickly as possible.

In a letter to staff, its chief executive, Andrew Swaffield, said the airline was carrying 14% more passengers than last year for £100m less revenue. He said the “root causes” of its declining revenue were terror attacks in Egypt and Tunisia and the decline of its Turkey business.

This is yet another victim of increased competition on European flight market. Germany’s second-biggest carrier Air Berlin  filed for insolvency in August, and Alitalia’s assets are under the hammer after the Italian flagship went insolvent, too. In September, Ryanair canceled 18,000 flights as it suspended 34 routes until March, blaming a problem with pilots’ vacation scheduling.

Source: Guardian, Bloomberg