Monarch Airlines has insisted it is "trading well" following speculation at the weekend over its future.
“Our flights are operating as normal, carrying Monarch passengers as scheduled,” the company said in a statement on Monday after unattributed reports on social media suggested the travel company was on the brink of collapse.
“Over the weekend there has been negative speculation about Monarch’s financial health,” Monarch said. “We’re unsure of where these rumours originated but we can confirm they are not true.”
Monarch, which includes Britain’s oldest airline brand as well as tour operator Cosmos Holidays and an aircraft maintenance unit, also replied to concerned customers on Twitter on Monday morning, saying the “rumours are not true” and flights were “operating as normal”.
‘Significant investment’
However, the company said it “expects to announce a significant investment from its stakeholders in the coming days” in order to “weather tougher market conditions and to fund its ongoing growth”.
Monarch, which was owned by the Swiss-Italian Mantegazza family for nearly half a century, had long been a profitable business. But in recent years the company has struggled amid a decline in charter flying and the rise of budget airlines, and has required several unsuccessful cash injections.
In October 2014, turnround specialist Greybull Capital invested £75 million in return for a 90 per cent stake in Monarch. The remaining 10 per cent of the company was passed to Monarch’s pension scheme.
Greybull – which made headlines earlier this year when it bought Tata Steel's European long-products unit, including the Scunthorpe steelworks, for £1 – initiated a restructuring plan following the acquisition, cutting about 700 jobs, reducing Monarch's aircraft fleet and scrapping long-haul flights in an effort to reposition the airline as a low-cost carrier.
Greybull declined to comment on Monday morning.
Monarch said on Monday that it expected to make more than £40 million in profit before interest, tax, depreciation and amortisation by the end of its financial year in October “despite a difficult period for the holiday industry due to terrorist incidents, Brexit and the resulting devaluation of sterling”.
Last year, Monarch reported its first profit in three years, posting underlying earnings of £40 million. – (Copyright The Financial Times Limited 2016)