What Caused The Collapse Of UK Carrier Monarch?

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It has been almost four years since Monarch Airlines ceased to exist. It ended operations on October 2nd, 2017, about 50 years after it was formed. With 35 aircraft in its final year, it had 123 routes across 16 countries from five UK bases. So what happened, and where did it fly?

London Luton was Monarch’s fourth-largest base in the carrier’s final 12 months. Photo: Getty Images.

Monarch had a long association with leisure and charter flying, but it had repositioned itself purely as a scheduled operator. This reorientation was a catalyst for its problems, but it was just one of many factors contributing to its decline.

Indeed, the carrier had struggled financially for years, with a combined operating loss of over half a billion (£502 million) between 2012 and 2016, according to the UK CAA and Companies House UK.

Monarch’s fleet comprised 35 aircraft in 2017 according to ch-aviation.com: 25 A321s; nine A320s; and a single B737-800 (G-ZBAV). Photo: Maarten Visser via Wikimedia.

A smaller airline with more exposure

Monarch reduced in size by 20% in the years preceding 2016, analyzing capacity using OAG data shows. At the same time, it was generating less revenue per passenger, not helped by the full focus on scheduled flying, often in competition with lower-cost operators. 85% of its routes had head-to-head competition, including with Ryanair.

Due to problems in Egypt and Turkey, the shift in capacity from those countries to Spain and Portugal didn’t help. In the year to September 2017, 75% of its capacity was deployed to Spain and Portugal, with other airlines doing the same. There was even more intense competition and therefore even lower fares.

Monarch competed head-to-head on 85% of its 123 routes. Photo: Getty Images

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The need for very high seat load factors

As the airline’s boss, Andrew Swaffield, said: “We’ve re-based ourselves now to a world where we see lower prices but with higher volumes.” To help make this work, an airline must have very low costs and very high seat load factors (SLF). However, Monarch had an average SLF of just 81% in the last few years, including 80.5% in 2017, and its costs had increased, as the airline’s administrator admitted.

With a small and reducing size, declining passenger numbers, falling revenue, rising costs, growing competition, and fairly low SLFs, and an undercurrent of losses, it wasn’t a surprise that it came to an end. Where did it fly?

Monarch had one 738, as shown, but had bet its future on the 737 MAX, with 45 on order to replace its A320s/A321s. Photo: Alec Wilson via Wikimedia.

Five UK bases

Monarch served just five UK airports in the 12 months to September 2017, with bases at them all. However, it was really all about London Gatwick, Manchester, and Birmingham, which together had over eight in ten of its total seats, as shown below.

  1. Gatwick: 2.21 million round-trip seats; 32 routes
  2. Manchester: 2.04 million; 31 routes
  3. Birmingham: 1.98 million; 34
  4. Luton: 904,000; 16
  5. Leeds Bradford: 369,000; 10
The A321 was all-important to Monarch. This example, ‘Alpa Golf, was delivered to Royal Jordanian before being used by Cyprus Airways. It arrived with Monarch in April 2013 and is now with Russia’s Red Wings. Photo: Rob Hodgkins via Wikimedia.

123 routes; Gatwick-Alicante was #1

Monarch had 123 routes in this period involving 16 countries. These obviously included the classic sun nations of Spain, Portugal, Greece, Turkey, and Cyprus and the likes of Germany, Finland, Switzerland, and Austria for skiing and Christmas reasons.

While a British Overseas Territory rather than a sovereign state, Gibraltar was Monarch’s fourth-largest country market, with routes from all of its bases except Leeds. The airline was the number-one carrier from the UK to Gibraltar that year, surpassing BA. However, Monarch’s most-served airport, of some 44 in its route map, was Alicante, reflected in the following top-15 routes.

  1. Gatwick to Alicante; 246,000 round-trip seats
  2. Manchester-Alicante; 229,000
  3. Gatwick-Malaga; 225,000
  4. Gatwick-Faro; 223,000
  5. Manchester-Malaga; 221,000
  6. Birmingham-Malaga; 202,000
  7. Gatwick-Tenerife South; 199,000
  8. Birmingham-Tenerife South; 193,000
  9. Manchester-Tenerife South; 189,000
  10. Gatwick-Palma; 186,000
  11. Manchester-Faro; 181,000
  12. Birmingham-Alicante; 180,000
  13. Birmingham-Faro; 162,000
  14. Manchester-Palma; 147,000
  15. Gatwick-Lanzarote; 137,000

The author recalls flying Luton-Larnaca aboard a Monarch A300, a great and memorable experience on a rare aircraft. Did you fly Monarch? If so, what were your thoughts? Let us know in the comments.



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