Monarch on track for profit after meeting 100-day targets
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Monarch Group is expected to return to profit this year after reaching its revenue and cost targets in the first 100 days of its restructure last year.
The group is set to reach double-digit earnings this year and will also benefit from a decline in jet fuel prices having un-hedged its position in September 2014.
Business is said to have been ‘trading well’ since Greybull Capital LLP took a majority stake in the firm, with ‘strong’ mobile bookings and other direct sales channels in the Christmas period. Its winter losses have been reduced by £20 million.
“We are delivering a proper restructuring and turnaround of Monarch as we said we would. There is much to be done, but we now have a business with much lower costs, a solid platform for developing sustainable profitability and a clear strategic focus,” said chief executive Andrew Swaffield.
Monarch is projected to post a loss of £44 million in 2014 but since a takeover by Greybull Capital has been taking measures to save £200 million in annual costs.
Its strategy includes stopping charter and long-haul flights from this summer, reducing its fleet by eight aircraft to 34 and ordering 30 Boeing 737 MAX 8 which are more efficient than older aircraft.
With its focus on the short-haul market the group will close its East Midlands operations and put its efforts on London Gatwick, London Luton, Birmingham, Manchester and Leeds Bradford.
“The restructuring process was painful for everyone and I would like to say a big thank you to all of our colleagues who have remained focused on delivering great service to our customers throughout this period. Our aim is for all our people to share in the future success of the business. We must also acknowledge the support from our many industry partners, without whom the restructure would not have been possible,” added Swaffield.
Marc Meyohas, partner of Greybull Capital added: “The refocused management team, led by Andrew Swaffield and now joined by Barry Nightingale [as CFO], are doing a great job in steering Monarch through the restructuring process. They have laid the groundwork for Monarch to re-establish itself as a profitable business and a leading leisure travel brand.”
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