Monarch is returning to the UK skies – but can it succeed?

This article is closed to new comments. Feel free to ask your question in the HfP forums.

• Mike says:

  22 Aug22 August 09:03

  The Monarch name is pretty irrelevant I feel. A lot of people shop on cost, particularly those with families.

  Look at the market currently, if they follow the JET2 model, destinations and chuck in the high desirables – e.g. Lapland, Iceland, I don’t see why it wouldn’t succeed.

• Tarmohamed says:

  22 Aug22 August 09:17

  Scheduling is more important. We’d rather arrive at our destination in the morning so we don’t need lose a day or have to pay for a night we don’t really use.

  • Danny says:

    22 Aug22 August 14:44

    Not really. Not everyone wants to pay £100 for an airport taxi / hotel just so they can get the 6:05am FlyLo flight to Zante.

    • Rob says:

      22 Aug22 August 17:53

      No-one wants 6.05 if hotel check in is 3pm. Sweet spot for me to Europe is 10-11am.

      • Ryan says:

        22 Aug22 August 18:24

        And who wants to fly at 0600 with a 0400 check in, then factoring travel to airport.

        Rob alluded to it earlier, mid morning departure and back on the UK based aircraft for the return journey.

        For me, as a parent with children, this is probably the most important as exit seats no good to us.

• Richie says:

  22 Aug22 August 09:41

  SOUthampton airport is looking for A320s for its extended runway. Some easyJet flights from SouthENd airport are poorly timed.

• Jeff says:

  22 Aug22 August 10:24

  I do wonder whether Chief Execs and associated entourage of failed airlines should stick to the golf course rather than wasting everybody’s time, where the business endgame is a foregone conclusion.

  • No longer Entitled says:

    22 Aug22 August 12:45

    But while you are building your failing company you can pay yourself a handsome wage and bleed your investors dry. For many, that is the goal.

    • yorkieflyer says:

      22 Aug22 August 15:01

      Precisely

• LittleNick says:

  22 Aug22 August 10:31

  I wonder who will take off first? Monarch or Global?

  • Rob says:

    22 Aug22 August 10:35

    Monarch should be a lot easier. Getting CAA approval and an AOC for an A380 service (ie proving you have the facilities, staff etc to operate safely) is going to be tough. No-one except BA has ever even had to write the necessary manuals for the UK authorities for an A380 service. A320 stuff should be a doddle BUT you can be pretty sure substantial amounts of money will be required in bond to cover the cost of a future repatriation if it goes down.

    Overall though, like all businesses you’re facing the fact that an investor can stick their money in the bank now and get 5% so investing in a start-up is far riskier than it was in the 1% days.

    • LittleNick says:

      22 Aug22 August 11:48

      Thanks for this insight, I forget all the other things that happen in the back to make an airline work. Appreciated.

    • Will says:

      22 Aug22 August 23:33

      I think the attempt to sell the ROI is that this is a blip and we’ll be back to zero rates in no time.

      Which by the way if you actually believed you’d be filling your boots with 5/10 year gilts now.

      • Rob says:

        23 Aug23 August 07:32

        You’re better on short term gilts because of the tax treatment, eg Jan 2025. 5%+ yield and virtually no tax as almost all gain is in the tax free redemption premium.

        • Will says:

          23 Aug23 August 13:15

          It’s not my field but surely if you were buying now at around 5% on the prediction that we’ll see them back closer to 0% within a few years you want as long left on the bond as possible (ie more years at 5% on your old bond vs new issue @ 0), while balancing the fact that longer term bonds tend not to go as close to zero as short terms.

          Tax is zero on the actual gain upon sale of a gilt isn’t it?

        • Rob says:

          23 Aug23 August 13:48

          Or gain on redemption.

          Not sure what the yield (taxable) Vs redemption gain is on a 5 year.

        • will says:

          23 Aug23 August 18:22

          Excuse me being dim witted but whats the gain on redemption if you just hold the gilt till end of term?

        • Rob says:

          23 Aug23 August 19:10

          The Jan 2025 gilt sells for 93p and yields a whopping 0.25%. In Jan 2025 it is redeemed for £1.

          The 7p per gilt capital gain you make is tax free due to a weird tax rule that says gilt gains are not liable to CGT.

          So … buy this now for 18 months and you’ll get 0.375p of coupons (taxable) and 7p of capital gain in January 2025, for a total return of 7.375p on your invested 93p. This is a return of 8% over 18 months so, roughly, 5.3% per year.

          However, because this is effectively all tax free (apart from tax on the 0.375p of coupon), it is the equivalent – for a 45% taxpayer – of getting 9.6% per annum of taxable bank interest.

        • will says:

          24 Aug24 August 01:01

          Had not even considered that, so effective tax free interest regardless of your income status. Very interesting quirk of Gilt tax treatment.

• David says:

  22 Aug22 August 11:28

  What happens to the debts accumulated by Monarch previously? Do they just get to call themselves “Monarch V2” and get to start with a clean slate? Much like your local Bob and Co LTD company that just fold with debts and no repercussions?

  • LittleNick says:

    22 Aug22 August 11:50

    Could be wrong but I think so (assuming who new business) as the new business has bought the assets from the old business with the debts. So payment of those assets I guess may pay off any creditors from the old business but I think the new business starts a clean otherwise.

  • Dubious says:

    22 Aug22 August 12:02

    It is possibly that they have bought the rights to the name and brand rather than buying the old company.

    • Rob says:

      22 Aug22 August 12:03

      Almost certainly.

  • Londonsteve says:

    22 Aug22 August 14:28

    It’s actually a common mistake to think you can fold one company and open another, wiping the debts of the old one. This is called phoenixing and is illegal, your creditors can pursue you through the courts if a transfer of company assets isn’t done by the book ensuring the old company has reserves to settle its debts. It goes on in practice because it’s far too easy to open and close UK companies with very little regulatory oversight and enforcement of illegal conduct. The grifters know this and take liberal advantage.

• ADS says:

  22 Aug22 August 11:45

  “‘Old’ Monarch was based at Luton Airport with additional operations from Gatwick, Leeds Bradford, Manchester and Birmingham. It would seem logical that any relaunch would follow a similar pattern, if only because the brand will be better known in the catchment area of those airports.”

  Hopefully they will start off with just one or two home bases … and see if their business model actually works !

• Londonsteve says:

  22 Aug22 August 14:33

  I’m surprised the Monarch name is deemed by anyone to hold such potential. To my ears it was a byword for charter flights from Luton to bucket and spade destinations, like Britannia. Zero glamour. I suppose there is some merit in starting with a brand name that has some recognition but I can’t imagine many people book flights with an airline just because they’ve ‘heard of them’. Price, departure airport and time counts for a lot more. There is also a case to be made for starting with a new identity that generates curiosity and (hopefully) excitement to ‘give them a whirl’. New is always more appealing than old, unless we’re talking about a national institution that Monarch certainly wasn’t.

  • tony says:

    22 Aug22 August 15:26

    But did you ever fly them? I only did a few times but the extra legroom up front and a well timed departure and/ or knock down pricing made for a great combo.

    I’d put them on a par with Jet Blue (aside from Mint…)

This article is closed to new comments. Feel free to ask your question in the HfP forums.