MONARCH PRE-CLOSE TRADING STATEMENT FOR THE YEAR TO 31 OCTOBER 2016
- Profits at EBITDA level on track at £48million (2015 £74m)
- Summer 2017 holiday bookings up 40%
Monarch today issues a pre-close trading statement for the year ended 31 October, 2016.
Group performance, in a particularly challenging year, remains in line with our expectations with a likely EBITDA of £48million (2015: £74m).
Monarch’s holiday bookings for Summer 2017 are currently up 40% year-on-year, with flight-only bookings up 10%. Monarch recently decided to end all credit card booking fees and will launch new flights to Porto, Zagreb and Stockholm in April 2017, growing the Group’s wide range of summer and year-round leisure destinations across Europe, all sold under the Monarch brand.
In October, the group successfully concluded its annual relicensing agreement with the CAA and finalised a £165million investment from majority shareholder Greybull Capital. As a direct result of that investment, the company is no longer required to ATOL protect flight only bookings, in line with all other UK airlines. This came into effect on 15th December 2016.
Andrew Swaffield, Chief Executive of Monarch Group, commented:
“I am pleased that, in the face of what is arguably the toughest trading environment ever faced by the industry, Monarch has maintained its profitable performance. Monarch continues to attract over six million passengers every year due to its unique heritage and excellent customer service.
“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 strength of both holiday and flight bookings for Summer 2017 demonstrates that our combination of frequent service to popular destinations, great value fares and top-notch service is proving popular with consumers.”
“The Group is well positioned to weather ongoing industry challenges and we look forward to continued growth and the arrival of our new fleet of B737-MAX8 aircraft from Spring 2018.“
Monarch launched new routes to Madrid and Lisbon in April 2016, which proved popular with customers for short breaks and longer stays year round. The December 2015 launch of flights to Tel-Aviv and Ovda (Eilat), have also been in high demand with people looking for winter city or sun destinations. Monarch’s Arctic experience holidays to Lapland continue to sell well for Winter 2016/17 and are now on sale for Winter 2017/18.
Monarch saw a significant growth in holiday booking to the Canaries, Mainland Spain and Portugal in the past 12 months, whilst more customers than ever chose 4-star holidays, representing nearly half of summer sales. City destinations including Barcelona, Venice, Rome and Gibraltar all saw double digit growth driven by greater numbers of younger travellers, whilst the flexible nature of Monarch’s holiday offering saw a growth in sales of nine to 12-night holidays over the traditional 14-night package.
It has also been a strong year for Monarch Aircraft Engineering Limited (“MAEL”), the Group’s engineering division, as it celebrates entering its 50th year. MAEL has consolidated its market leading position in new technology aircraft successfully completing an increasing number of projects for third-party customers at its 110,000 sq ft aircraft maintenance facility at Birmingham Airport, where it is currently recruiting additional skilled engineers as part of an ongoing programme to cater for growing demand.
In Spring 2018, Monarch will receive the first of a new fleet of 30 fuel efficient Boeing 737 MAX-8 aircraft with an option on a further 15. These aircraft will improve passengers’ in-flight experience and transform the airline’s cost base by reducing its £130million annual fuel bill by around a quarter and maintenance costs by 80%.