Monarch Airlines confirmed yesterday (June 3) that its losses during the traditionally difficult winter months reduced by a better than forecasted £40m ($61.4m), with the carrier showing signs that its cost cutting measures are beginning to take effect.
The airline, which last year announced it had slashed £200m ($307m) in annual costs saw its losses fall to £69.9m ($107.6m) in the six months up to April 30, down from the £110.6m ($170.4m) it posted for the same period last year.
Monarch attributed the smaller loss to its “self-help” turnaround strategy yielding savings of £30m ($46.1m), while it also achieved a £10m ($15.3m) saving on fuel costs, reflecting the current trend of airlines benefiting financially from lower fuel prices. The carrier said its maintenance arm Monarch Aircraft Engineering (MAEL) remained a strong performer, seeing a growth in third-partycustomers during the past six months, during which time it also opened a new maintenance base in Copenhagen. In light of this, Monarch said it plans to further improve MAEL’s efficiency and ensure its MRO division makes a bigger financial contribution to the group in years to come.
The faith the airline group has in MAEL is in contrast to recent decisions to walk away from long-haul flights and charter operations as Monarch readjusts its focus on becoming a short-haul only low-cost carrier (LCC) targeting the leisure market.
Another key change is the transition of its fleet from an all Airbus fleet comprised of A320 family and A330 aircraft to an all 737 one, with Monarch finalising a $3.2bn order last November to take 30 737 MAX 8 aircraft starting from Q2 2018.
Despite the sizeable loss, Monarch’s CEO Andrew Swaffield said he remains positive that the changes the airline has made to its structure, network and cost base sets it “in good stead to achieve the turnaround” it needs.
While Swaffield is optimistic for Monarch’s future, changing its fortunes will be no easy task as it looks to reinvent itself and become more competitive in the increasingly saturated European LCC market.