Monarch airline’s decision to restructure to become a predominantly scheduled airline has nothing to do with the decline of the package holiday or taking on the lowcost carriers.
Speaking on the second day of the ITT conference in Italy Fabio Mantegazza, the group’s chairman, said the change simply reflected the direction the industry was going in.
He said it would allow Monarch to have a more balanced relationship with its tour operator partners in a market in which scheduled flying was growing and charter business was not.
“We simply reacted to what the business was telling us which was charter, which is a model that is still valued in some circumstances, is not growing and scheduled is,” he said.
Mantegazza added the growth phase for the two dominant lowcost airlines, easyJet and Ryanair was coming to an end and that they were having to change their business models too.
He expressed amazement at how they are able to get away with some of their pricing policies such as requiring customers to pay to check in online and to pay if they check in at the airport.
But he added: “They are trying to cope with a different set of problems than I am trying to cope with. They have a very important presence in the market but they are not really in the same business as we are.
“They are a growth story that cannot grow anymore. For various reasons growing is becoming more risky and tougher for them.”
Mantegazza added: “We have not changed the strategy. We are adapting to the way the business is evolving and as far as tour operators are concerned we want to do business with tour operators as long as it makes sense.
“There used to be a sort of dance that had to happen between the guy selling the charter programme and the tour operator buying it and it was a dance of domination where the charter salesman used to try to foist as much risk on the tour operator and tie them in knots.
“As long as charter was the way in which we organised ourselves that was almost inevitable. The easyJet and Ryanair the market has changed – there is a better business environment.
“We have dealt with tour operator all our lives, we understand tour operations, and we think selling them scheduled capacity gives us the opportunity for a more balanced business relationship.”
Challenged from the audience by Olympic Holidays’ George Michalias about Monarch’s decision to withdraw its summer capacity from the tour operator, Mantegazza refused to be drawn saying simply.
“I gave you an answer in February I don’t understand why you think asking the same thing here in this forum will give you a different answer.”
Mantegazza said there were three main things impacting the industry at the moment, the first being oil prices, the second the fact that his customers are “skint” and the third government taxes.
He said as the industry was too obsessed “cutting each others throats” the government was “helping itself to our revenues”. This came without a political price, he added, because most customers did not realise what was happening and travel firms were being forced to absorb the additional costs.