The CAA confirmed the Air Travel Trust fund will pay only the cost of repatriating and refunding Atol-protected customers.
CAA deputy director of consumer protection David Moesli said: “We were given instructions by the UK government to carry out this exercise.
“The government will pay. The Air Travel Trust is only covering the Atol-protected customers. However, the government has said it intends to recover the money from other parties.”
The CAA and Department for Transport have described the repatriation effort as “unprecedented”.
The operation will bring home about 110,000 passengers, with 62 repatriation flights due to operate today alone.
CAA head of Atol Andy Cohen said: “Under instructions from the government we’ve launched a fill repatriation programme today. We have a fleet of aircraft from 16 different carriers, including British, North American and Qatari.”
The CAA insisted it had not sent Monarch into bankruptcy by refusing to renew its Atol (Air Tour Operator) licence. The airline required a new licence for its package holiday business, about 5% of its flying, from the start of October.
Cohen said: “The group has failed for financial reasons.”
The CAA also insisted it would not have been possible for Monarch Airlines to continue flying without package holiday business, Monarch Travel Group.
Moesli said: “These two businesses were joined at the hip. They really were one business. Monarch had been trying to convert to a low-cost, short-haul carrier, but it was a leisure carrier. You cannot pull the two companies apart.”
A third part of the Monarch group, its aircraft engineering division, continues to trade despite Monarch Airlines and Monarch Travel Group going into administration.
Asked about the number of advance bookings with Monarch for this winter and beyond, Cohen said: “There are a significant amount of forward bookings, but it is manageable.”
The CAA expects debit card issuers to join credit card issuers in refunding customers’ bookings, although there is no legal requirement for them to do so.
Moesli said: “We have high expectations the debit card issuers will make payments.”
Monarch rescue flights ‘to cost £60m’
More than 11,000 were scheduled to have been flown home by Monday night, the Civil Aviation Authority (CAA) said.
The government called it the biggest repatriation exercise in peacetime.
Monarch Airlines ceased trading early on Monday, leading to nearly 1,900 job losses and the cancellation of all its flights and holidays.
The collapse of the 50-year old company is the largest ever for a UK airline.
The government is set to pick up the tab for flying Monarch passengers home, but is talking to card companies about sharing some of the cost.
The repatriation comes as it also emerged:
- About 56,000 Monarch passengers are due to be flown back this week
- More than half are in mainland Spain or on Spanish islands, according to the CAA
- BBC business editor Simon Jack said Monarch had been looking at potential tie-ups with several interested parties before its collapse
- Those talks were partly derailed by uncertainty surrounding the future regulation of the UK aviation industry after the Brexit vote, he said
- Monarch’s administrators said the airline’s pension holders should see no impact from the firm’s collapse (Pension Fund article in the FT)
What happened to Monarch?
The UK’s fifth biggest airline was placed in administration at 04:00 BST on Monday – a time when the airline had no planes in the air.
Passengers were then sent text messages informing them flights had been cancelled – but some customers were already at airports.
Monarch, which reported a £291m loss last year, had employed about 2,100 people. About 250 staff have been retained to help with repatriation efforts.
Terror attacks in Tunisia and Egypt, increased competition, and the weak pound have been blamed for Monarch’s demise.
…… then there is more about customers and their rights etc ……..
What has gone wrong?
Monarch reported a loss of £291m for the year to October 2016, compared with a profit of £27m for the previous 12 months, after revenues slumped.
It had been in last-ditch talks with the CAA about renewing its licence to sell package holidays, but failed to reach a deal.
Blair Nimmo, from administrator KPMG, said its collapse was a result of “depressed prices” in the short-haul travel market, alongside increased fuel costs and handling charges as a result of a weak pound.
Monarch’s owner, Greybull Capital, had been trying to sell part or all of its short-haul operation so it could focus on more profitable long-haul routes, and said it was “very sorry” it had not been able to turn around its fortunes.
What have the authorities said?
The CAA has organised 34 chartered planes from 16 different airlines – Easyjet and Qatar Airways among them – to return passengers to the UK over the next fortnight.
Chief executive Andrew Haines said passengers would not be charged for the repatriation flights, which would match Monarch’s original schedule “as closely as possible”, adding: “There will undoubtedly be some disruption.”
Transport Secretary Chris Grayling described it as the “biggest ever peacetime repatriation”.
Mr Grayling said the Department for Work and Pensions would give support to those affected and that airlines had already told him they may seek to employ Monarch staff.
Easyjet said it would be “really pleased” to hire former Monarch employees, saying it had 400 cabin crew vacancies at Gatwick Airport and 100 at Luton, as well as job openings for pilots and head office staff.
Moody’s: Pound drop from Brexit will shake UK airlines; Airports can withstand short term impact
Global Credit Research – 3 Feb 2017 (Moodys)
People’s revised travel choices and operating dollar costs could see UK airlines’ revenues take a hit, with airports’ passenger growth likely to halve over the next two years due to the resulting macroeconomic landscape following the Brexit vote, says Moody’s Investors Service in a report published today.
Moody’s expects that demand for air travel will be driven by weaker economic sentiment as a result of uncertainty over the shape of the UK’s future trading arrangements with the EU, as well as with other major economies with which the UK has trade arrangements in place by virtue of its current membership of the EU.
Moody’s report, titled “Impact of Brexit vote on UK airports and airlines: Airports to Withstand Short Term Impacts but Airlines Weakened by Fall in Sterling”, is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release.
Overall, in the short term, passenger numbers will continue to grow, albeit at a slower rate, enabling UK airports to withstand the immediate impact of the Brexit vote. This benefit will however not be felt evenly across the UK. Manchester, Luton and Birmingham airports which are dominated by outbound traffic are more exposed to weaker domestic economic prospects and sterling’s depreciation, while others like Heathrow, and to a certain extent Stansted airport, are better insulated from UK economic conditions because of their higher proportion of inbound traffic. The last two also serve London, a major tourist destination so a weaker pound benefits tourists.
UK airlines will be weakened by the sterling’s depreciation against the dollar, as a significant proportion of their costs are denominated in US dollars while sterling revenue is a high percentage of the total.
UK airlines will continue to suffer in 2017 on the back of a slowdown in outbound leisure travel, particularly to the US, as UK residents’ put travel plans on hold as the pound’s depreciation makes the cost of holidaying abroad more expensive. Also, weaker economic prospects and concerns over terrorism threats in Europe will continue to put off many US tourists from flying to the UK to benefit from the weaker pound. Long-haul carriers, such as British Airways, Plc (Baa3 stable) and Virgin Atlantic (unrated), which traditionally carry British-based leisure passengers to the US will be particularly impacted.
……. and there is much more ………