“I wanted to express thanks to the trade for supporting us. Monarch has always been dependent on the travel trade and I wanted to say thank you.” He declined to comment on the


fact that the CAA had arranged for aircraft to be in position to repatriate passengers from October 1 in the event Monarch ceased flying, but said: “The issues with relicensing have been unfortunate. It did have an impact on bookings – more on holidays than flights.” However, Swaffield insisted:


“Monarch has enjoyed a great relationship with the CAA. The past two weeks have been difficult, but the regulator has a job to do.” He said the turnaround at


the group had proceeded well following the restructure and purchase by Greybull in October 2014, posting a £125 million profit turnaround.


Difficult market


“Things began to turn” following the crash of a Russian holiday jet after departing Sharm el-Sheikh in October last year, he said. Swaffield added: “We’ve had


endless terrorist attacks. We’ve had Turkey decimated. We’ve had huge capacity into Spain. We’ve seen increases in fuel and ground- handling charges as a result of the fall in sterling following the Brexit vote. It’s not just a Monarch issue, but we had to ensure Monarch was properly capitalised. “We don’t expect terrorism to disappear; we don’t expect the pound to suddenly bounce back; and we have the uncertainty of Brexit. It’s essential we ensured we had the capital in the business to ensure we flourish.”


Swaffield said it had been the “most challenging year” of his career. “When you look at the combination of events for airlines, it has been a perfect storm.” Looking ahead, he said: “We


predict a relatively difficult market – low yields, a low [exchange rate of the] pound to the dollar and to the euro, and reasonably similar levels of terrorism. So it is a relatively hostile environment. The equity injected into the business is designed to address that.”


Boeing order


He declined to give details of the renegotiated terms of a deal with Boeing to buy 30 of the latest, more fuel-efficient 737 MAX aircraft. But speaking outside the


convention, Swaffield said: “The aircraft order will bring significant savings. We spend £120 million a year on fuel. The fleet order will be transformative for us. By 2021 we’ll have the youngest fleet of any airline in Europe. “We’ve restructured the deal significantly, but there is a high degree of confidentiality about it. “There is an understanding


Monarch may enter into the sale and leaseback [of the aircraft], but that is a decision for 2017 – maybe as early as January, maybe later in the year.” He confirmed: “The investment


has come from Greybull. The capital injection is built around our six-year business plan and takes us to the end of that, with the last Boeing 737 coming in and the last Airbus leaving in 2022.” Swaffield added: “The


investment is from now, not spread over the six years. Some [of the capital] is there already, some will be invested over a few


weeks. The CAA is satisfied with the arrangements. The shareholder has demonstrated support for us and I intend to show it was a wise decision.” He revealed: “We were focused


on [obtaining] investment for months, but these things take time.” Asked whether he believes


Greybull has invested for the long term, Swaffield said: “There has been speculation in the press about people being interested in Monarch. I won’t comment except to say there has been interest from multiple parties and there is clearly a trend of consolidation in aviation. “My focus is on Monarch as a standalone business. We’ve put that interest to one side. We’re very happy with our owners. They have shown their support.” However, he added: “I’m not


going to say Greybull would never sell the business.”


Growth ambitions


Asked if he foresees growth at Monarch, Swaffield said: “We lost 700-1,000 jobs as part of the restructure. We’ve grown some back. My hope would be that over the six-year business plan we would begin to grow again. “That is the long-term objective


– for relatively modest growth. It would take us beyond where we were in 2014.” Monarch will now seek to


reassure consumers and trade that it is here for the long term. Swaffield said: “Part of our challenge is to rebuild confidence. We were doing extremely well. I hope ending the uncertainty has done the trick in terms of confidence. “We will need to reach out to


Part of our challenge is to rebuild confidence. I hope ending the uncertainty has done the trick. We’ve increased our marketing spend to reach out to customers and the trade


customers and to the trade. We have increased our marketing spend. You will see a louder voice from Monarch. Traditionally, Monarch spent about half what its peer group did on marketing. Now we’re matching their funding so you will see more from Monarch. “We’re top of the second


division of airline brands with Thomas Cook, Thomson and Flybe,


‘WE STAND READY TO GO BACK TO SHARM’


Sharm el-Sheikh remains closed to UK airlines, pending a Department for Transport decision on security at the airport and a change to Foreign Office advice. Swaffield said: “The


government hasn’t given any reason to believe it’s ready to reopen Sharm airport. My own view is the airport will be ready, but it’s not my job. We’re dependent on the government reaching that decision. “It’s a very important market.


It’s hot, it’s affordable and it’s not far away. Sharm being out of the market is a big problem. “The Canary Islands are more


expensive. We fly to Eilat but it is expensive. There is a big group of people who don’t want to fly long-haul. “It’s a crying shame to see


somewhere suffer because of terrorism. But it’s the job of the government. I hope they come to a decision. “We stand ready to go back in as soon as Sharm is ready. “However, the deadline for


Christmas is almost past. You’re probably talking the February half-term now [as the earliest possible return of flying]. Once that [opportunity] has gone it’s probably not worth talking about summer 2017 [for a return].”


but we would like to push that north [up]. Our brand is one of our greatest assets. We’ll be a lot more aggressive. “Our goal is to become Europe’s


most-recommended airline.” Swaffield praised Monarch’s


staff for their performance through the latest crisis. “I’ve seen a heroic effort by staff


to maintain that [service] with a smile. Our people have been


outstanding,” he said. ❯ Comment, page 32


20 October 2016 travelweekly.co.uk 11


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