Monarch Airlines' 1H2015 shows recovery progress after a near-death experience in 2014

After forecasting a return to profit for FY2015 in Jan-2015, the Monarch Group reported narrower losses for 1H2015 (Nov-2014 to Apr-2015). This indicates progress with its restructuring programme, although the very seasonal pattern of its business means 2H2015 will be crucial.

Monarch Group has not yet published its FY2014 annual report, but CAPA has examined its FY2014 accounts, recently filed with the UK Registrar of Companies. These reveal a heavy loss in FY2014, mainly due to the Group's airline. Monarch Airlines grew too rapidly and suffered both from a fall in unit revenue and an increase in unit cost. Moreover, the Group almost ran out of cash.

In 1H2015, capacity was cut, slowing the fall in unit revenue. Moreover, unit cost fell, partly due to lower fuel prices, but also thanks to the restructuring programme. The sale of the Group towards the end of Oct-2014 brought new shareholders and much needed liquidity, saving it from collapse and giving it a second chance. Monarch's progress in 1H2015 shows that it intends to take it.