Monarch says still on course to return to profitability this year

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AIRLINE and holidays company Monarch Group stuck with its forecast for a return to profitability this year, after a turnaround plan helped its seasonal loss narrow by 37 per cent in its first half.

Monarch, now in the hands of investment firm Greybull Capital following its sale by Switzerland’s Mantegazza family last year, said £30m of the improved winter performance was due to “self-help” measures.

The Luton-based company flies holidaymakers to European destinations from five bases: Leeds Bradford Airport, Manchester, Birmingham, Luton and Gatwick.

It said it remained on track to deliver double digit earnings for the 12 months ended October 31, in line with a forecast made in January.

Monarch’s chief financial officer Barry Nightgale said that the company was confident about its forward order book. “If the trends continue the way they are, we’ll quickly eat into those winter losses,” he said.

Monarch competes against Europe’s biggest and second biggest budget carriers Ryanair and easyJet respectively in the continent’s fiercely competitive short-haul market, where both airlines have recently suggested that fares could fall slightly.

“Our goal is to make sure our cost base is competitive so that we can respond to whatever the market does and we’re very confident we can do that,” chief executive Andrew Swaffield said.

For the six months ended April 30, Monarch posted a loss of £69.9m compared to the £110.6m loss in the same period last year.

Capacity reductions, ending loss-making routes, plus around 700 job losses and pay cuts of between 30 and 35 per cent for remaining staff, as well as a cheaper fuel bill, all contributed to the reduced loss.

Monarch plans to revamp its fleet in the next five years.