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Interview Tim Jeans, Monarch Airlines
cgray@ttglive.com
020 7921 8003
Chris Gray
Jeans says he has yet to see a “better exam- ple of commercial suicide” than Aer Lingus’s Gatwick adventure. “The strategy was wrong and the execution
was wrong and it became a race to the bottom on price led by Aer Lingus. It was painful when that was going on.” In addition to Aer Lingus’s retreat, bmibaby
had dropped routes in Manchester and Birm- ingham, and head to head competition with Ryanair had become less intense, giving Monarch more room to breathe. The commitment of Monarch’s billionaire own-
ers the Mantegazza family, whose Globus group also owns Cosmos, was beyond doubt, he adds. “The business was run for a while at arms
Jeans: price race to bottom is over
Monarch Airlines managing director Tim Jeans says the carrier has turned a corner after a year that saw top level resignations and pundits tip it as the next carrier to go bust. Chris Gray reports
“Not true, never has been true,” he says. Monarch’s name kept cropping up ever since a bookmaker claimed they were the airline most likely to go bust, which coincided with a string of top levels departures, including the chief executive Peter Brown. Jeans admits that last year was a difficult time for Monarch – as it was for every other airline in the world – but insists the difficulties were never as great as the rumours suggested. “Once we got through Christmas trading
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became far more robust. The rate of sale was more akin to 2007 or 2008. Selling prices and volume were both up,” he says. Margins and volume have continued to
improve through the first three months of 2010, so much so that Monarch has reinstated capacity
16.04.2010
im Jeans is unequivocal when some of the rumours that swirled around the industry about Monarch in the first few months of the year are put to him.
taken out for the winter and so had no spare air- craft to lend to British Airways during the strike. Jeans unleashes a raft of year on year forward booking statistics to demonstrate the point: Manchester to Alicante up 15%, Birmingham to Alicante up 31%, Manchester to Malaga up 11%, Gatwick to Alicante up 9% It was being driven by customers let down by the lack of a barbecue summer last year, the rise in value of sterling, lower fuel prices and fears about unemployment subsiding. Those factors had helped the industry gener-
ally, but Monarch had also been aided by a relaxation of competition on key routes as the price wars of last year played themselves out.
Commercial suicide
Top of the list was the retreat from Gatwick by Aer Lingus, after its attempt to set up a no-frills base at the airport triggered an inevitable price war with easyJet and Ryanair.
length but that is no longer the case. The share- holders are close to the business as we go into a large fleet renewal programme and its right that they should be close to us as we go through that process.”
Election fears
Jeans still sees threatening storm clouds hang- ing over summer 2010 with the potential of the election to send the value of sterling down again, more rises in Air Passenger Duty, and the chance of the oil prices creeping up again. But average fares are now 6-7% higher than
last year, ancillary revenue prices are as much as 15% up for an extra bag or extra leg room, and new Turkey routes to Dalaman, Bodrum and Antalya starting in May are selling well. Flight-only trade sales through sister
company Avro are 20% up this year and Jeans sees Monarch’s proportion of trade sales rising again, as the main rival is now Kiss Flights. He rejects suggestions Kiss was filling a gap needed by small operators who found places on Monarch or the big two’s aircraft too expensive. “The reason Monarch is the airline of choice
for non-vertically integrated tour operators is because when we offer something they know that we have an aircraft in that slot.” He also predicts the proportion of trade sales will continue to rise as reviving consumer confi- dence leads people to look for a better experi- ence rather than being totally led on price. “The race to the bottom has run its course
because customers eventually recognise that there are differences in providers. “They recognise there is a difference between a Monarch flight and a Ryanair flight, between a Goldtrail flight and a Kuoni flight and that has a value, and maybe agents recognise that too.”
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