Greek airports were forced to cancel flights on 05-May-2010, as air traffic controllers took part in a national strike over wage cuts for civil servants (Harrow Oberserver, 05-May-2010). Monarch Airlines announced (05-May-2010) was forced to reschedule its services to Kos and Rhodes as a result. [more]
Strike forces Greek airports to cancel more flights
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Europe's aviation strike spike could signal a cyclical peak - with downturn to follow
One swallow does not make a spring and nor does a rash of aviation strike news guarantee a turning point for the aviation industry. But the signs are ominous. In the month of Jun-2016 (to 20-Jun-2016), there have been 136 articles on CAPA's website mentioning the word 'strike'. This compares with 81 for the first 20 days of Jun-2015. For 2016 so far (1-Jan-2016 to 20-Jun-2016), the 's' word has occurred in 594 articles – about 20% more than in the same period in each of the past two years. If this rate continues, 2016 could be the biggest year for strike-related articles since before the global financial crisis.
The vast majority of the Jun-2016 articles – 80% – relate to Europe. A significant source is air traffic control disputes, particularly French ATC. There have also been strikes and/or strike threats involving airport workers and ground handlers. Among European airlines, Air France has generated the most coverage for its ongoing dispute with its pilots, and it may also face a cabin crew strike. Lufthansa has not yet faced a strike by its employees this year, but has not yet reached new agreements with pilots or cabin crew after industrial action last year.
History tells us that labour's demands grow as profits rise. The apparent increase in industrial action this year could be a signal of an approaching peak in the airline profit cycle. There are other causes of unrest, such as impending French labour legislation, but the correlation reflects some history.
Monarch Airlines: group receives new cash from Greybull Capital but profit outlook is down
The latest investment in the Monarch Group by its majority shareholder Greybull Capital avoided the loss of its ATOL licences and the possible suspension of operations. Moreover, it has given Monarch the opportunity to bridge the gap between now and the planned delivery of the first of its new 30 Boeing 737MAX aircraft in 2018.
Nevertheless, Monarch continues to face significant challenges. Europe's short/medium-haul markets are feeling significant downward pressure on unit revenue – particularly in the leisure markets that Monarch serves. This is due to overcapacity and concerns about terrorism in key Monarch markets. Brexit and the sharp devaluation of GBP (it has fallen by 30% against the EUR over the past 12 months) are further challenges for the LCC.
Although Monarch quickly quashed rumours of its financial difficulties in late Sep-2016 and then secured new funds, its commentary indicated that its profit for the year to Oct-2016 would be lower than in the previous year. It has an uneven track record of profitability and has often flown with close to empty cash reserves. Those reserves have been partially replenished, but only sustainable improvements in profitability will avoid the need for further cash calls in the future.