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Based at London’s Luton Airport, Monarch Airlines is one of the largest charter airlines in Europe and a subsidiary of the Monarch Travel Group. The carrier operates a network of scheduled seasonal leisure services within the Mediterranean and charter operations within Europe and to Canada, the Middle East and Canada for its parent. company.
Location of Monarch Airlines main hub (Manchester Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Monarch Airlines fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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Jet2.com’s parent, Dart Group PLC, enjoyed a strong increase in revenues and profit in the first half of the year to Mar-2014. Leisure-focused LCC Jet2.com is the group’s principal business, although it also includes a tour operator and a distribution business. The airline saw very healthy growth in traffic and revenues, improved yields and a positive trend in ancillary revenues.
Nevertheless, the outlook for the second half, which covers the winter season, is for increased losses. Moreover, profit growth for the full year, while still likely, is not guaranteed. The seasonality in the group’s business is growing, largely reflecting the wide gap in passenger demand for Jet2.com's leisure network between the summer and the winter.
Counter-seasonal business lines such as charter and cargo operations help to contain this. Nevertheless, comparison with its nearest peers, such as Monarch Airlines and Transavia, suggests that more could be done to narrow the seasonal gap. Any increase in the number of year-round destinations would probably also bring the challenge of increased competition with more cost-efficient LCCs
The current political turmoil in Egypt has led to a number of European nations advising their citizens not to travel to the North African country. The response by airlines has varied, but a number have announced the suspension of flights. Whether flights are suspended or not, demand for travel to Egypt will be hit by the ongoing news coverage of events there and the advice of many European governments.
In this report, we examine the importance of European airlines to the air travel market in Egypt and the importance of Egypt to European airlines. Egypt may need European airlines more than they need it, but Egypt represents a noticeable (and in some cases growing) proportion of the total network for a number of them. The year-round attraction of Egypt as a leisure destination, contrasting with the summer-only appeal of other destinations, means that this proportion is greater in the winter than in the summer for many European carriers.
A low-cost carrier by virtue of its unit costs and revenues, SunExpress’ costs are nevertheless too high for its revenues and it lost EUR12 million in 2012. Jointly owned by Turkish Airlines and Lufthansa, it has a focus on leisure routes between Germany and Turkey. It has some market-leading positions on key routes, but also faces a large number of competitors in this very price sensitive market. Its highly seasonal capacity profile adds to the challenge of achieving year-round profitability.
SunExpress’ value to its parent companies extends beyond its position on routes between their two countries. It has also provided them with more than 20 years of working together and this could point the way to closer cooperation between them in other regions as they look to combat the threat of the Gulf carriers. The appointment last week of the CEO of SunExpress Germany, a subsidiary of SunExpress, to the Supervisory Board of Lufthansa Group company Austrian Airlines further highlights the growing ties.
On 12-Jun-2013, privately owned Monarch Group published its annual report and accounts (for the year to Oct-2012) for the first time and issued a trading update for 1HFY2013. The group also says that, following a Nov-2011 re-financing, its turnaround strategy is on course to return the loss-making group to profit in FY2013.
Monarch Group, which includes tour operations and aircraft engineering in addition to scheduled leisure airline Monarch Airlines, is currently considering an order of up to 62 new aircraft for delivery up to 2024. Executive chairman Iain Rawlinson has recently denied that the company is seeking a public listing or new shareholders.
Nevertheless, the size of this planned aircraft order and the first-time publication of an annual report, which reveals an under-capitalised balance sheet, may well fuel speculation that the group is indeed considering just that.
Airlines in Transition 6: Working with airlines & consumers (and Charlie Sheen?) to enhance revenues
Airline distribution expert Gillian Gibson, formerly of Travelport and Amadeus, led a session on distribution at CAPA’s Airlines in Transition conference in Dublin. She closed her presentation with a quote from wild man of Hollywood Charlie Sheen that refers to the power of the mind in overcoming old habits: “the only thing I’m addicted to right now is winning”.
The airline industry needs to change its mindset to overcome old habits and to develop technology to enable a more retail-oriented approach to distribution. Ancillary revenues have grown to the point where the very word ‘ancillary’ looks like a misnomer and yet traditional distribution channels such as GDS have not been able to carry this key revenue stream. Direct channels continue to grow, with mobile phone apps adding to airline.com sites, and yet very few offer an ‘end-to-end’ booking capability.
Can the industry break its old addictions and find a more integrated winning formula for distribution?
In our first article based on CAPA’s recent Airlines in Transition conference, we looked at the evolution of airline alliances. In general, this theme is relevant only to the larger carriers with significant long-haul networks, but 86% of the airlines in CAPA’s database are not full members of a branded global alliance (BGA). In this second report from the conference, we ask where this leaves smaller and non-aligned airlines?
There are a number of benefits and issues that alliance members associate with their membership of a BGA. However, CAPA’s panel of smaller and non-aligned carriers believe that they can address these factors better and more flexibly by remaining outside the BGAs. These issues are mainly connected to expanding and securing the available revenue pool through wider access to markets, brand loyalty and distribution.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.