Monarch Group hopes about 600 staff will take voluntary redundancy as it confirmed it had accepted a £75 million takeover bid by an investment firm.
The troubled company needs to make 900 job losses as part of a radical turnaround plan that also includes at least 10 aircraft being taken out of the 42-strong Monarch Airlines fleet.
Private investment firm Greybull Capital is preparing to take over the business for more than £75 million from the group’s long-term shareholders, principally the Mantegazza family.
The agreement would involve Monarch Travel Group, which includes Cosmos, Monarch Airlines and its aircraft engineering arm.
Group chief executive Andrew Swaffield admitted staff were having to make sacrifices so that the company has a future under potential new owners.
Swaffield told Travel Weekly that he expected the deal to be completed in a month’s time, on the condition that restructuring plans were finalised.
He revealed that more than 80% of pilots, cabin crew and engineers had agreed to accept pay cuts, while the workforce will drop from 3,300 to 2,400, with at least 300 job losses expected to be compulsory redundancies.
The group aims to tackle the cost base of the organisation to compete with low-cost rivals Ryanair and easyJet.
Monarch aims to concentrate on “longer” short-haul leisure routes and abandon long-haul and charter flying.
Swaffield pledged that by targeting costs and putting the group on course for profitability, customers “won’t pay more” to travel by Monarch than its established budget competitors.
Greybull managing director Marc Meyohas denied the current owners were providing any further funding but said they had to deliver the company in an agreed state.
He described Monarch as an “iconic brand”, with a new management team focused on a credible restructuring plan.
The group revealed in August that it was carrying out a strategic review and identified a number of cost-reduction initiatives that needed to be made to compete effectively.