Late last week, Monarch Airlines, one of the UK’s largest charter airlines, went into administration. This marks the largest bankruptcy of any UK carrier. The event stranded over 100,000 holiday goers, and forced the largest repatriation in the UK during peacetime. With the airline unable to maintain its schedule, and going as far as saying its Twitter feed would no longer be monitored, what will happen next?

 

Immediate Effects:

With Monarch out of service, many airlines will have to step up to bring the bankrupt airlines customers home. This may include airlines like Thomas Cook, British Airways, Virgin Atlantic, etc. The airlines’ staff is now without a job, and their equipment will be parked or given back to lessors. As the airline tries to figure out what to do in its final breath, stockholders will have to decide how to salvage what little they can of their assets. In all, a disaster for thousands of people.

Future of Monarch’s Fleet, Slots and Crew

I suspect that Monarch’s assets will be purchased piecemeal. Monarch had large presence at various UK airports, including Gatwick, Luton, Manchester, etc. In what I believe would be a very smart coordinated move for British-based airlines, the assets should be divided by hub. If I were British Airways, I would buy up the slots at Gatwick, allowing them to expand at that airport. If I were other holiday airlines in the UK, I would purchase assets in holiday airports, such as Luton. Finally, for Manchester, it would really depend on who would want to buy it. I see benefits for many airlines buying the Manchester slots and assets. In any case, I don’t suspect that the employees that were formerly Monarch Airlines will have a hard time finding a new job.

Fleet and 737MAX Orders

The biggest pebble in the shoe I can see here is the fleet assets. Their A320 family aircraft can be easily assimilated into British Airways, EasyJet, etc. These carriers would be able to redeploy them on their routes, as well as continuing some of the routes they purchase. The airline had ordered 45 737MAX to replace their Airbus fleet. I suspect that a logical customer for these purchase rights would be Ryanair. They could easily assimilate the fleet into their huge 737NG fleet. IF Ryanair does not purchase the order rights, then I suspect that another new investor would add a sub fleet of 737s to their current fleets. I think this would be really helpful for airlines like Virgin Atlantic, that have tried to have a regional arm but failed. If BA purchased them, it would be a return of Boeing narrow bodies to the airline.

 

Landing Thoughts:

My thoughts go to those who have lost their jobs after the failure of Monarch. It must be a very difficult time for all of them. The customers on holiday will be able to return home, at a very heavy burden to the taxpayer. However, I believe all is not lost for what is Monarch’s remaining assets. If/When the airline’s assets are purchased, we can expect to see some of their crew, planes and legacy return. I see a sparkle of hope for the employees, and hopefully this will be the case.

What do you think? Who will buy the Monarch Airline assets? Will they be bought piecemeal, or will one carrier buy them out entirely?

 

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Images from: Wikimedia Commons