Revisiting Monarch

The rebirth of Monarch Airlines by Greybull Capitol has seen the airline move from one which is loss making, to one which is now making a little money. I speculated eighteen months ago that the model wasn’t viable and it was more valuable to another airline or broken up, and that view on my part has not changed.

Once again we see reports that the airline could be sold again, with a number of ‘suitors’ waiting in the wings, possibly in the short term for slots at Gatwick Airport which are becoming scarce, especially in the peak slots in the morning – something which would be highly prized by a number of airlines.

Initially HNA, the parent company of Chinese airline Hainan was said to be interest. They wouldn’t be able to own the whole airline due to EU ownership rules – although lets see what happens on the referendum as to what happens with that one. You would think that with HNA behind them, who were also interested in holding a stake of Virgin America, that the airline would operate nearly as they do now.

Then you have other theories, the most notable being easyJet. You can understand why easyJet would want to buy them. They are active in nearly all their bases, and hold prize slots at their fortress hub at Gatwick, the biggest part of their network. It would only strengthen their presence at the airport – but as we have seen recently their advantage is being eroded.

Their Gatwick route structure has been dented with a reduction in German routes to Cologne and Dusseldorf, along with Strasbourg and Moscow, not helped by rival Ryanair muscling in on primary airports from their Stansted base. Even if easyJet had the slots you would have to wonder what they would do with them.

As I suggested last time, I still consider British Airways the best fit for Monarch. BA is really a London centric airport, and getting more slots at Gatwick will be a bonus, especially if they want to expand their point-to-point long haul operation. Short haul is also doing well against fierce competition with a more leisure focus. Although it could happen, many onlookers think it will be unlikely.

Whatever happens over the next few months, it could spark the end of the Monarch name in British aviation.

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