Monarch Airlines have said profits are likely to fall 35 percent this year, just months after securing a bailout from majority shareholder Greybull Capital.
The budget airline said its full-year earnings were expected to fall from £74 million to £48 million in 2016, despite bookings for summer 2017 already up 40 percent on last year.
However, chief executive Andrew Swaffield said Monarch was “well positioned to weather ongoing industry challenges”, adding:
“The record investment in the business announced in October, enhanced marketing initiatives including our first TV advertising campaign in three years and continuing cost control means Monarch enters 2017 in a strong position.”
The announcement comes just months after the struggling airline received a £165 million lifeline from majority shareholder Greybull Capital, allowing the airline to renew its membership of the Air Travel Organisers’ Licensing (Atol) scheme and upgrade its aircraft. The investment fund bought a majority stake in Monarch in 2014, investing £125 million.
Monarch described the trading period as its “toughest ever”, feeling the impact of air strikes, terrorist attacks and the weakening of the pound in the wake of the June referendum. Sterling has fallen 16 percent against the US dollar and 9 percent against the euro since the June Brexit vote, creating a problem for the airline, who make over 80 percent of its revenues in pounds but spend on fuel and leases in dollars.
“Prices are very keen at the moment, there is a lot of competition out there so we are seeing volumes up, but great value for consumers in terms of prices,” Swaffield said.
Monarch Airlines are based in Luton, England, and sells holidays and flights to European destinations.