Monarch Airlines sold by Mantegazza family to Greybull Capital, trying to make a go of it

Monarch has been trying to compete against easyJet and Ryanair.  It has already axed 700 jobs out of its 3,000 employees and reduce its aircraft fleet to 34 from 42.  The airline will now re-focus solely on short-haul European flights and ditch charter flights. Monarch has now agreed a rescue deal that will result in Switzerland’s Mantegazza dynasty, who started the business with just two aircraft in Luton in 1968, selling up completely. The family is impatient with the airline’s financial troubles after Monarch asked for a third bailout in July despite already injecting £75m into the business in 2011, just two years after putting £45m into the business. Investment firm Greybull Capital has now agreed to pump £125m of permanent capital and liquidity facilities into Monarch. Greybull sees the deal as a “long-term investment”, and will own 90% of the airline. The remaining 10% is held by Monarch’s pension fund, which has a reported to have a deficit of more than £300m. Monarch had some 6,248,160 passengers in 2013 compared with Ryanair at 81,400,000  and EasyJet at 61,332,800. 
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Monarch Airlines rescued as Mantegazzas take flight

Greybull Capital pumps £125m into struggling airline as Switzerland’s wealthy Mantegazza family, who founded the business in 1968, exit entirely

By Ashley Armstrong, M&A Reporter (Telegraph)

24 Oct 2014

Monarch Airlines has agreed a rescue deal that will result in Switzerland’s Mantegazza dynasty, who started the business with just two aircraft in Luton in 1968, selling up completely.

Family patriarch Sergio Mantegazza is understood to have become impatient with the airline’s financial troubles after Monarch asked for a third bailout in July despite already injecting £75m into the business in 2011, just two years after putting £45m into the business.

Investment firm Greybull Capital has now agreed to pump £125m of permanent capital and liquidity facilities into Monarch, which has been anchored by a £50m investment.

As a result Greybull, which sees the deal as a “long-term investment”, will own 90pc of the airline, with the remaining 10pc held by Monarch’s pension protection fund. The carrier’s pension fund reportedly has a deficit of more than £300m by some calculations.

Andrew Swaffield, Monarch chief executive, said: “I am delighted to welcome the Greybull team as the new owners of the Monarch Group. We have a shared vision for the strategic direction and prospects for the business, and I am looking forward to working with them to implement the exciting plans for building our future.”

Greybull’s investment was contingent on Monarch’s turnaround plan being sucessful. The airline has already axed 700 jobs out of its 3,000 employees and reduce its aircraft fleet to 34 from 42. The airline will now recfocus solely on short-haul European flights and ditch charter flights.

The terms were agreed on Friday night at law firm Freshfield’s offices, just hours ahead of Monarch’s licence with the Civil Aviation Authority expiring.

Monarch required as much as £60m to shore up its finances, but the situation was considered so dire that restructuring specialists KPMG were waiting in the wings in case a search for a new investor failed.

The search for a new financial backer by Dean Street Advisors, the boutique advisory firm founded by investment bankers Mervyn Metcalf and Graeme Atkinson, and aviation advisory firm Seabury Capital drew interest from private equity investors and venture capitalist Jon Moulton’s Better Capital.

Greybull Capital was founded in 2010 by financier brothers Nathaniel and Marc Meyohas, who were pushed into the spotlight as one of the backers of Comet, only for the electricals chain to collapse months later with 7,000 jobs lost. Greybull’s structured financing meant that it recouped most of its money after the collapse.

Sergio Mantegazza is worth $4.7bn (£2.8bn), according to Forbes magazine.
Commenting on behalf of the selling shareholders, Fabio Mantegazza said: “We are very proud to have created one of the most loved aviation brands in the UK over the past 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future, with secure financial backing and clear strategic goals and we wish the Group every success.”

http://www.telegraph.co.uk/finance/newsbysector/transport/11186804/Monarch-Airlines-rescued-as-Mantegazzas-take-flight.html

 

 

Monarch had some 6,248,160 in 2013 compared with Ryanair at 81,400,000  and EasyJet at 61,332,800.

Anna Aero http://www.anna.aero/wp-content/uploads/european-airlines-traffic-trends.xls


 

 

Earlier:

Monarch airlines plans to slash workforce by 1,000 jobs, up to 30%, to compete with Ryanair and EasyJet

Up to 1,000 jobs, about one third of its work force, will be cut at Monarch as it tries an overhaul to reposition itself as a low-cost airline competing with easyJet and Ryanair. Monarch is currently controlled by a wealthy Swiss-Italian family,  and has been undertaking a strategic review of its business in order  to attract new investors. It will drop its charter flights and focus on short-haul scheduled flights. It will cut its fleet of aircraft from 42 to 30. It will keep its focus on holiday destinations like Spain, the Canary Islands and Turkey but add more European cities and skiing destinations. Overall, it will fly more frequently to fewer destinations. Monarch has its HQ at Luton airport, is made up of Monarch Airlines, tour operator Cosmos Holidays and an aircraft maintenance division. They will no longer fly from East Midlands Airport. Monarch’s MD said “We’re on a trajectory of changing from a charter airline to a scheduled European low-cost carrier.” They recently ordered new planes, at the Farnborough air show.  This is a £1.75bn order for 30 new Boeing 737 aircraft to be delivered by 2020. They carried about 6.8 million passengers in 2013.

http://www.airportwatch.org.uk/monarch-airlines-plans-to-slash-workforce-by-1000-jobs-up-to-30-to-compete-with-ryanair-and-easyjet/

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