Monarch closes in on key fleet renewal decision

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UK carrier Monarch Airlines will finalise its fleet renewal decision in the last quarter of this year as it looks to build on progress which will sees it set to hit its cost-savings targets.

The fleet renewal will form a further part of recent efforts to improve the cost-competitiveness of the UK operator. "Over the last two years we have focused on making the airline more profitable and more competitive. We have done that very effectively," explains Iain Rawlinson, executive group chairman at the travel group. Rawlinson is taking interim charge of the airline while a successor is found for Martin George, who the airline today announced is leaving to take up a senior non-airline job.

Rawlinson says the carrier is on track to meet cost savings under a two-year plan which completes next month. "We took £31 million ($49 million) annual costs out of the airline in year one. The target for year two was £20 million and we will achieve this," he says.

"There is more to do in meeting our targets but the strategic direction of the airline is to be competitive [with our peer group] at a unit cost level and in many areas of the business we are close to where we want to be," Rawlinson adds.

He also points to the "very significant fleet savings" the airline expects from its forthcoming fleet renewal decision. Monarch, which operates a mixed fleet today, is looking at an order for around 60 aircraft and is considering Airbus and Boeing narrowbodies along with Bombardier's Cseries, over a six to eight-year delivery period. "This is a very important part of the jigsaw," he says. "We expect to announce that in October or November of this year."

Alongside improving its costs base, the airline has grown rapidly over the year, aided by exploiting the void left by the collapse of UK budget carrier Bmibaby at East Midlands and Birmingham airports. That growth is reflected in passenger volumes running more than a fifth higher in August compared with the same month last year.

"Growth is very much on the agenda," Rawlinson adds, pointing to the importance of customer service in the airline's product offering. "We are very much driven by the scheduled network. We are not a low-cost carrier in that we don't follow that presentation of our brand. We are a customer service-led brand. But we have to be able to complete with low-cost carriers head to head."