news Interview: Fabio Mantegazza, chairman, Monarch Travel Group
Turning Monarch into a happy family
Fabio Mantegazza talks about Monarch Travel Group’s future and its plans to work more closely with independent tour operators in an
exclusive interview with TTG’s Chris Gray at The Travel Convention
capacity. Fabio Mantegazza has said he is working on a “new proposition” for operators that will provide them with more capacity in the eastern Mediterranean in a way that is more flexible in terms of selling seats. Speaking to TTGat the Travel Convention in Malta, Mantegazza reinforced the backing of his billionaire family for the Monarch Travel Group, saying he was pleased with the results of last year’s cash support and restructure, which had got the company working on a group basis. According to him the restructure has stopped
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separate divisions in the group operating as competing “fiefdoms”. He had originally worked on the restructuring
strategy about four years ago, he said, but put it was put on hold during discussions about the group’s direction. It aims to make the most of opportunities for different divisions to work to- gether, and that has already seen results. There were record load factors at the end of this summer – up about two percentage points – after Monarch’s tour operator arm worked more closely with its scheduled airline operation, and millions of pounds have consequently been added to the bottom line. Other key parts of the strategy look at distribution and how Monarch works with tour operators outside the group.
Lack of capacity Operators are facing a shortage of capacity to eastern Mediterranean destinations following the collapse of XL in 2008 and Goldtrail this year, as well as seat only operator Kiss Flights. Viking Airlines AB, which also served the region, has recently suspended its operations
06 22.10.2010
he owner of the Monarch Travel Group has said he wants to find new ways of working with independent tour operators to provide them with extra
for the winter, but switched flights to its sister company Viking Hellas Aviation, and vowed to return next year (see facing page). Mantegazza said the Monarch group faced a
threat from no-frills carriers expanding their programmes to the region and filling the gap. “Whatever happens to these eastern Mediterranean routes we have to make sure we are the people supplying the capacity,” he said. “We have been selling charter, but I think we can do more than that. We need a new proposi- tion for our tour operator customers and it needs
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to be tailor-made for them. “There is nervousness among tour operators because they think that if a route goes scheduled it is a threat to them, but there are ways of doing it that will better suit their businesses. “We will sit down with them and say: ‘This is
the problem, what can we do about it?’” The solution could be finding a halfway house
between selling operators charter allocations and them booking individual seats through API feeds or screen-scraping. However, he said Monarch would not be
providing capacity at the rock bottom prices offered by operators such as Goldtrail.
In a better place Mantegazza feels that Monarch is now better placed to respond to opportunities than it has been for many years. He took on a much more hands-on role after the departure of former chief executive Peter Brown in February. New chief executive Conrad Clifford will start in December. Mantegazza said there had been “big
differences” between Monarch’s former management and his family – or shareholders, as the company calls them – over the direction of the group, but the strategy was now clear. The family’s commitment had been shown by its support last year when Monarch made its first loss of £30 million. He said the family had provided cash and credit facilities worth £65 million and a package of support worth more. Mantegazza dismissed suggestions the family
were reluctant to invest more last year, saying: “The family never wavered in its support and will continue to support Monarch. It has the resources and is happy with the results of giving that support, so it is prepared to do more.”
Broadening distribution A part of the strategy he worked on four years ago, but that has not so far been implemented, is widening Monarch’s distribution channels. It is now a key priority and will include
offering products through online agents such as Expedia and
Lastminute.com, where Mantegazza said Monarch did not currently have a presence. He said the company was also looking
at developing an e-commerce platform to distribute its products, but stressed it would be “complimentary” to its existing distribution partners and there was no intention of moving away from agents. “In the past there might have been internal
conflict about balancing the distribution platform,” he said. “We will be able to fashion it so it does not threaten existing partners, and that comes back to us working as a group.”
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