Monarch making ‘good progress’ on road to profitability

Monarch Group today announced that “good progress” is being made towards a turnaround plan to deliver profits at all trading divisions for the year to October 2013.

The Cosmos Holidays and Monarch Airlines parent reported a rise in group turnover from  £757.8 million to £827.7 million in the year to October.

Group-wide cost savings came in as planned at £31.6 million.

The group plans to seek proposals for re-equipping the Monarch Airlines’ fleet and is seeking a total of 45 aircraft for delivery up to 2021. Several older aircraft in the existing fleet are now being retired from service as the carrier seeks to become cost competitive against budget airlines.

No figure on overall losses was given but the group claimed “strong profitable growth” in tour operations sales and yields, driven by successful winter and summer package holiday programmes, particularly to Goa, Greece and Florida, for which sales significantly outperformed the market.

The group claimed “significant advances” being made in the group’s e-commerce capabilities including mobile, with 20 million unique visitors to its online platforms, up 21% on the previous year.

Monarch Airlines’ carryings rose from 6.3 million to 6.4 million passengers.

Within this there was a 15.7% increase in scheduled passengers from 4.6 million to 5.3 million.

This followed expansion to six airports, with the addition of East Midlands and Leeds/Bradford planned for 2013 and growth in the scheduled network to 88 routes, including successful absorption of routes formerly operated by Bmibaby.

Further profitable growth was reported in Monarch Aircraft Engineering turnover, with third-party customer revenues increasing to 29% of the total from 19% two years ago.

Executive chairman, Iain Rawlinson, said: “All the Group’s main divisions have performed well in 2012 in what have been challenging market conditions.

“The airline has achieved good yield growth in line with expectations and moved quickly to develop and strengthen its market position following the closure of Bmibaby.

“The tour operations and engineering divisions maintained their profitable performance of recent years and now have laid good foundations for growth.

“The group’s overall results reflect strong discipline on cost control and delivery of an effective e-commerce strategy. This represents sound progress in the first year of our two-year turnaround plan.”

He added: “Although the macro-economic environment remains uncertain, we are well positioned to continue this performance and have made a good start to the new year with satisfactory levels of advance bookings across our consumer brands and within the engineering activity.

“Brand recognition of Monarch and Cosmos is increasing at an encouraging rate, supported by improved use of technology, and consumer offerings differentiated by service levels and choice.

”In what are generally tough trading conditions, Monarch Airlines is well advanced with its modernisation and cost reduction programmes when other larger operators continue to face important restructuring challenges, and it provides clear and real choice to consumers who value customer service at a competitive price.

“Meanwhile, the group’s your operations division has potential for good growth as it makes new investments in its new selling platform and in increasing awareness of the Cosmos brand, and Monarch Aircraft Engineering has already announced its plans for expansion with a further engineering facility at Birmingham airport.”

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