A £75 million cash injection has been made into Monarch Group triggering a major restructuring.
This comes as the private Monarch Airlines and Cosmos holding company confirmed a £45 million loss in the year to October blamed on “turbulent market conditions and high oil prices”.
Only “modest growth” is forecast for 2012 despite cost savings at the airline which will see older aircraft retired. It is the second time in two years that the wealthy Swiss-based Mantegazza have stepped in to bolster the finances of the group.
The refinancing will see Monarch Airlines develop scheduled flying with plans to expand from 30 to 40 aircraft “over the medium term”. The objective is to see passenger numbers rise from 7 million to 10 million a year.
The carrier is adding two additional Airbus A320s and will open 14 new routes next year from Luton, Gatwick and Manchester to Italy, Croatia and Greece, bringing the scheduled route network up to 73.
The airline will continue to provide capacity to third party tour operators and will continue to operate selected long haul charter services. Further growth is planned for Cosmos and other Monarch Travel group companies after they achieved an unspecified “strong turnaround in profitability and growth” in the last year.
The group is to expand its online offerings by optimising existing e-commerce platforms run by Monarch Airlines and Cosmos. “This will include increasing volumes and cross-selling opportunities through advances in technology and improving customer experience,” the group said. Executive chairman Iain Rawlinson said:
“Following the successful reorganisation of the group in 2010, we have further developed our strategy to prosper in the high cost environment in which we now live, and we have realigned our organisation to unlock the full value of our under-exploited brands and to grow the group.
“This repositioning is already realising substantial benefits as initiatives which were introduced during 2010 are beginning to yield good results. “The injection of new capital announced today from the shareholders in support of our business plan now provides a stable financial platform from which to develop further.”
He added: “I firmly believe that from the combination of stable background and the correct strategy we will exploit and strengthen our niche market position and take advantage of the opportunities which will undoubtedly arise as our sector adapts to the current challenging market conditions.”