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Airlines

Post ATOL fiasco, Monarch should stick to its roots – Leisure

Monarch Airlines has a fantastic brand, extremely well respected in the UK as being a quality carrier to the sun. Yes, that is right, as an independent airline the biggest asset is the brand, one which is looked upon by the public as one of the better leisure carriers for their yearly break.

A lot has changed over the last few years, especially for the airline which has downscaled to make a profit by leaving long haul and charter flying behind to concentrate on the newer ‘Scheduled’ side of the business. First it was called Monarch Crown Service, before being expanded to Monarch Scheduled later becoming the all encompassing airline it is today. Over that period it has specialised in routes to the sun from UK airports, especially the Canaries, Span, Portugal, Turkey and Egypt. A few of those markets have had their troubles this year, which hasn’t helped the situation, but it is the area in which the airline in known for.

Under the current ownership (Graybull Capitol), another trend has appeared, that of low-frequency city routes as a ‘low cost airline’, heavily served by more specialist carriers. The recent addition of Luton, Birmingham and Manchester to Stockholm on a less than daily basis against Norwegian is brave, while Gatwick and Manchester to Zagreb is interesting against WizzAir.

By the nature of the airline, it just can’t operate these routes to the best of its ability, thwarted by the number of the aircraft in the fleet and the higher cost compared to Ryanair or Wizzair. These are just a distraction, and the focus should be on what the airline is known for, and more importantly emphasise quality which could include a few changes.

British Airways has enjoyed success at Gatwick airport, appealing to what they describe as ‘Premium Leisure’, but that is only Gatwick and there is scope for that to be rolled out across the UK. Monarch is the perfect carrier to do that with bases in Luton, Birmingham, Manchester and Leeds Bradford. Although Ryanair has already shown that the lowest price always wins, which in some cases is true, there is scope for a more premium offering on leisure routes.

At the front of the aircraft are already extra leg room seats. Why not turn those into a more ‘Premium Economy’ version of BA’s Club Europe, offering the extra legroom along with maybe a free drink or snack and maybe some extra luggage. The same goes for down the back of the bus, with more flexible luggage allowances and the expanded option of online check-in.

There are clearly holes in the route map of Monarch, with areas not exploited on the ‘Premium Leisure’ market, which could also tie into the tour operation nicely. Upmarket destinations like Sardinia, Sicily and Corsica. On the longer side of the network, The Gambia is emerging as a hotspot in travel once again, along with Cape Verde which has almost been exclusive to TUI in the UK, and is ripe for an independent to emerge. It would also solve some of the destination issues in winter, with the Canaries almost maxing out in capacity this year.

So, keep costs low… While appealing to the market which don’t mind paying a little extra for quality (and refuse to fly on EasyJet or Ryanair), and expand in markets which have little competition.

The trade wants Monarch to prosper, but first it needs to innovate and listen to the public.

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Airlines

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.

Categories
Airlines

British Airways: One Monarch to rule them all

British Airways was once the darling of the UK skies, flying from around the UK to domestic, European and International destinations. Deregulation happened, and the low cost airlines eroded the market for the flag carrier at regional airports retreating to London, and specifically its home hub at London Heathrow.

After years of decline, routes at Gatwick were also restructured, firstly offloading franchise operator GB Airways to easyJet, who did a lot of leisure flying for British Airways, and then outsourcing ground operations to reduce cost to compete with the likes of easyJet who are dominant at Gatwick.

Slowly rebuilding British Airways at Gatwick now has a very leisure orientated route network flying to destinations such as the Canary Islands, Italy, Greece, the Algarve, Southern Spain along with short business and domestic routes such as Jersey, Dublin, Amsterdam and Scotland.

One of British Airways’s challengers at Gatwick is Monarch, who also have a leisure focus programme. Facing another restructure, Monarch has been loosing money for a number of years and new management has been brought in to turn the former holiday airline into a European low cost airline.  Of late, Monarch has been an airline that has lost direction, with having a charter operation, long haul arm as well as having the now dominant scheduled business.

Things are changing though for Monarch, and with the prospect that more funding will not be forthcoming hopes rest on turning things around with a new portfolio of routes, and dropping bases such as East Midlands with a fewer number of aircraft.  A new aircraft order for 30 737 MAX 8 aircraft will kickstart the change for the carrier, changing from a near all Airbus fleet. Fail, and the predators will be circling.

Ok, so how could the two be couple together?  Many have speculated that IAG owned Vueling would make a good substitute to British Airways mainline at Gatwick in a effort to save cost. That hasn’t happened and in fact the airlines actually compete on the London Gatwick to Barcelona route head –to – head.

Both British Airways and Monarch have a similar route portfolio at Gatwick, both operating to Tenerife, Lanzarote, Fuerteventura, Faro, Malaga, Alicante, Ibiza, Palma, Nice, Barcelona, Venice, Verona, Dubrovnik, Larnaca, Paphos, next year you can add Dalaman and Heraklion to that list. With such a cross over, the slots would be a very lucrative win for British Airways, fighting back against easyJet, now the dominant airline at Gatwick.

The slots could then be used to counter the fight posed by easyJet, launching new routes currently flown by Monarch like Funchal, Sharm El Sheikh and Antalya, strengthening current schedules and new destinations.

These could also be snapped up by other airlines, including easyJet who would have an even more safe number one position at Gatwick, or Norwegian who’s footprint is growing in the UK market along with its long haul operation.

I would suggest the big plan should be different though, the boldest since British Airways set up GO, their low cost airline and acquire Monarch Airlines.

Gatwick has a different market to Heathrow, British Airways are clearly targeting the leisure traveller, and have been pioneers in cost reducing initiatives such as charging for bags and seat reservation charges.  As these have worked at Gatwick, they have infiltrated the route network at Heathrow bringing the same benefits to the consumer.

But what if Gatwick was different, and was set out on it’s own plan, on a similar way GO was 15 years ago. Firstly the British Airways name would disappear from short haul from Gatwick, although British Airways would remain the brand for the long haul, but still leisure routes.

Using the heritage of the airline, I would suggest Speedbird as the name, a nod to years gone past, with a new branding featuring the old BOAC emblem. You could keep the British AIrways uniform, along with the new interior which will be featured in the refurbished aircraft coming to the airline at the end of the year.

A stronger airline at Gatwick would help their fight against easyJet and Norwegian, and put the airline on an equal footing to its rivals. A new route portfolio, including the leisure routes featured now, along with new routes that have both a business and leisure focus like Lisbon, Munich, Prague along with seasonal routes such as Mykonos, Santorini, Kefalonia, Bastia, Olbia.

I’m surprised that the British Airways brand has survived so long at Gatwick, and not morphed into the low cost airline it should be.