Monarch Airlines restructure Part 1: a solid return to profit, with reduced fleet

The privately owned Monarch Group no longer publishes a glossy annual report for all to see, a practice that has been discontinued since its 2014 acquisition by turnaround specialists Greybull Capital. Such reticence is sometimes a sign of having something to hide. Not so here; the group's statutory accounts for the year ended Oct-2015 were recently filed with the UK's Companies House. They show a strong return to profit for the Monarch Group, whose largest business is Monarch Airlines.

In the previous year, FY2014, the airline had grown too rapidly and plunged into a heavy loss, while the Monarch Group had almost run out of cash. A subsequent restructuring programme, devised by the management and backed by the new shareholders, sought to restore profitability. The FY2015 accounts demonstrate the success of the restructuring, which involved capacity cuts (mainly in the summer), fleet reduction, withdrawal from charter and long haul flying, a shrinking of the workforce and new labour contracts. With profits restored, Monarch is now growing once more.

This first part of CAPA's analysis of Monarch's restructuring examines the changes to its capacity, schedule network and fleet. Part 2 will consider its improved financial results and future prospects.