Monarch: The sad demise of a great airline.

Monarch: The sad demise of a great airline.

Four Reasons why Monarch failed(according to the BBC):-

Yet again the BBC seeks to have a go at Brexit again, listing the dollar pound ratio as number one for the sad demise of Monarch Airlines. If one reads the article this should be number four on the list. Because the dollar - pound ratio has affected all UK airlines.

More significant is item No.3 - Greybull moving away Monarch from long haul to short hall, right into the teeth of the opposition; Rynair, EasyJet and Whizz etc. One simply cannot copy established competitors thinking it is possible to do the job better. Just look at the passenger numbers from 2015. IMHO, Greybull took a decision, possibly because of the problems in Tunisia, Sharm el Sheik etc

Which also affected the competitors. They realised the mistake too late.

Monarch had a 45 airliner order with Boeing, neither Greybull or Boeing will want to lose their investments.

Could Monarch rise again like a Phoenix from the ashes ? Or are the markets full with capacity already ?

"As soon as the money men think of planes, common sense takes flight."
Is the headline from the City Editor, Jim Armitage of the Evening Standard.
He argues that Greybull was dazzled by the airline business and pumped money into a losing situation. Perhaps to an extent that is true, but there are other factors. Trying to compete with the EasyJets and Ryanairs of this world, was always going to be near impossible, British Airways, Air France etc, have been finding it rather difficult themselves. 
It was all down to finding a different model, this takes someone special, someone with a great knowledge of aviation and the tourist business in general. That is why I agree with Jim Armitage's headline.
Something in a similar way happened to me in 1987. I met a young high level financier, an American working for Pacific Investments or some such name like that. He told me confidently that he was financing a new airline, that was to fly from Glasgow and Edinburgh to some Baltic states. "What aircraft will you use?" I enquired.
"A Bae 748." He replied.
"What ! That can only fly at 200 knots with a tailwind and flies at about 10,000 feet. Slow and bumpy all the way!" I was shocked.
"We got a great deal from Bae." He arrogantly asserted, looking down at me. I was not a whizz-kid financer. I sent him a few options for suitable aircraft. It was ignored.
Six weeks later the airline failed.

The government claims there is not a crisis in aviation?

Well......

Air Berlin is insolvent.

Alitalia is insolvent.

Only the EU system allows Air Berlin and Alitalia to continue to fly.

Ryanair cancels many flights, allegedly because of a problem with crew annual leave.

British Airways has two computer crashes.



Crisis, what crisis ?

Four reasons why Monarch failed(according to the BBC)

Airlines: Willie Walsh & Sir Tim Clark interviewed.

Airlines: Willie Walsh & Sir Tim Clark, interviewed.

Last year I attended a question and answer session at the World Travel Market.

It involved Willie Walsh, CEO of IAG, which includes British Airways and Sir Tim Clark President of Emirates Airlines.

Quite a bit has happened since November 2016. British Airways have had two computer crashes, greatly upsetting their passengers. Also, a couple of strikes and it is not clear whether the cabin staff issues have been resolved.

We have lost Monarch Airlines, a sad loss, it was a great airline.

Emirates have continued…….

Willie Walsh considered that alliances will be coming to an end, ‘One World’ , ‘StarAlliance’ etc. Quite likely there would be mergers instead.

The introduction into the market of low cost long haul airlines might well shake things up. These include Norwegian and Scoot etc.

Willie Walsh thought that business models were changing and a label means nothing. Aer Lingus which is now part of IAG, makes a profit on the Atlantic with low cost fares.

However Norwegian runs on small margins, of course, pay for most things on top of the original fare.  

Michael O’Leary at Ryanair is also looking at short haul.

Tim Clark of Emirates claimed that he had had a difficult year, as there has been a slow down in Africa and South America.

There is a lot of capacity out there, China will continue to be busy. Willie Walsh continued that they had a good year and for him the industry is getting better. Would he say that now ?

They both agreed that Air France and KLM may have difficulties as they tend to be resistant to change. In other words, they don’t intend to take the cheap route, - yet ? Running on commercial lines as against political ones was seen as being essential. Was there a hint there ? On purpose ? Willie Walsh claimed he had a better cost base than Air France, was that a reference on the difference between UK and EU practices ? On the other hand KLM has always had strong leadership. A indication that they would adapt and survive.

America would always be a big market even with a strong dollar. Three hundred and thirty million people help. They both agreed that the US carriers were making phenomenal profits. 

Sir Tim Clark would really like an upgrade of the Airbus A380, his main aircraft. Newer engines and a fuselage stretch, Airbus do not want to know apparently.

With regard to the Third runway at Heathrow, Willie Walsh thought a cost of £800 million for a multi-storey car park, totally excessive. That might be £17,000 per space, ridiculous he thought. I don’t doubt he is right. They both made the point about costs, ignore that and one will be in trouble. Terminal 5 was way to expensive to build !

There was no doubt they both considered costs too important to be taken for granted. The only problem, is, that conflicts and politics around the world have a major impact.

From Autumn 2017, it can be seen that Tunisia, Egypt and Turkey and their problems are already hitting some airlines hard. Witness the demise of Monarch Airlines in the UK, they regularly flew to these destinations. Now everybody tries to squeeze into the same markets.

The author would like to be positive……..but ?

Willie Walsh

Sir Tim Clark & Willie Walsh at the interview