mavml
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Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 8:24 pm

Monarch Airlines owner seeks exit

http://www.thesundaytimes.co.uk/sto/...iness/Companies/article1682268.ece

THE owner of Monarch Airlines is weighing a sale of the holiday carrier less than 18 months after rescuing it from collapse.

This appeared in the Sunday Times today. Article is subscription only but goes on to mention possible buyers as U2 and DY.
 
TC957
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RE: Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 8:39 pm

Interesting. But these venture capital investment companies like Greybull are in the business to make money. If they see a return on their investment in Monarch for greater than the sum they paid then naturally they want to test if bidders come forward.
 
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OA260
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RE: Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 8:47 pm

Quoting mavml (Thread starter):
This appeared in the Sunday Times today. Article is subscription only but goes on to mention possible buyers as U2 and DY.

It could be a positive that they have made their money and want to sell it on. Despite the issues it has faced with the damaging effects to its North African operations it has faired well. It would be a shame to see EZY/DY buy it up and loose the brand though. Hopefully if they do sell it will be to someone who wants to maintain and grow the brand.
 
mavml
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RE: Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 8:49 pm

And with fuel where it is, and some economic uncertainty on the horizon, now is a good time to sell. I wonder if the Max order will be a help or a hinderence to any deal. The delivery slots are useful, but in Europe most potential airline acquirers will be Airbus operators, DY, FR and LS being the main relevant exceptions. I'm sure the net will be cast wider than just other airlines though, in a similar manner to the Virgin America discussion.
 
by738
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RE: Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 8:57 pm

These investments companies intrigue me, just in the way LCY GIP and EDI next in line for a grab em and run sell off. Interesting times, someones certainly making a mint.
 
IBA346
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RE: Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 10:20 pm

I wonder if IAG would be interested in merging Monarch with Vueling's small but rapidly growing UK operations. Vueling seems keen on growing in the UK and giving easyjet some more competition. Monarch has a fair presence in BCN and other Spanish destinations where Vueling is strong. A purchase would accelerate Vueling's UK growth plans by several years.

Monarch's large 737 order would be a problem however.

[Edited 2016-03-27 15:43:32]
 
gilesdavies
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RE: Greybull Looking To Sell Monarch?

Sun Mar 27, 2016 10:31 pm

Here is an article from the Telegraph confirming the same storey:
www.telegraph.co.uk/business/2016/03...be-considering-exit-after-just-17/

It doesn't really come as surprise to me, as Greybull the investment company that purchased the airline and seems to have turned it around, are renowned for exiting businesses and selling them for a profit at the earliest opportunity they can make a decent return on their money.

The 737 MAX order which is supposed to replace the A320/1's on a 1 for 1 basis are due for delivery in 2018, this order for aircraft was placed before Greybull took over the airline and I would imagine, they are not keen to dig deep into their orders and purchase these aircraft. When the current A320/1's are doing the job sufficiently and fuel prices are currently low.

I think there are only likely to be two major contenders looking to purchase the airline and both of these options will cause the demise of the airline as we know it. Either Norwegian or easyJet and will absorb the airline into their current operations.

My reasoning for this is both the above potential airlines have a major presence at Gatwick and the only way to immediately expand there is to get slots from other airlines. Monarch have approximately 8-10 aircraft based at the airport and this would allow both airlines to significantly expand their offering.

For easyJet they would also be able to immediately expand at Luton (which they are keen to do so, once expansion work at the airport is complete), where aircraft stand space is currently nearing capacity, and Monarch base five aircraft there. So easyJet could grow their base to potentially 25 aircraft immediately... Also both Monarch and easyJet have their HQ at the airport, and will provide easyJet with valuable office space which they are screaming out for, plus another maintenance hangar.

While there is plenty capacity available at Manchester, easyJet could grow their exisiting Manchester base and also give them access to Birmingham which they have hardly any presence. The exisiting A320's will work well with easyJet's exisiting fleet, not sure on the airlines view on inheriting A321's, but could give them access to a larger aircraft for the busier routes. The only downside being, easyJet operate a young fleet and many of Monarch's fleet are 10-15 years old.

I would expect them to cancel the 737 MAX order, as I doubt they would want a small subfleet of 33 of this aircraft type, when they are currently an all Airbus fleet, and possibly negotiate with GreyBull to absorb any cancellation fees, as part of the deal.

Norwegian has started to grow its presence at BHX and MAN, so taking over Monarch could give them quick access to growth at both these airports. Not sure they would be interested in the LTN/LBA bases.

With Norwegian's future fleet being a mixed Airbus A320 and Boeing 737 family fleet, the exisiting Monarch fleet and the new 737 MAX could quite easily be absorbed.
 
BestWestern
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 12:34 am

What does Monarch offer easyjet that they cannot do themselves?
Greetings from Hong Kong.... a subsidiary of China Inc.
 
MEA-707
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 9:43 am

I can see them merging with Jet2, their business cultures and future fleets can be a match. Both Monarch and Jet2 also gain traction this way with some economics of scale. Also as their size are a bit comparible, that means the Monarch staff might like it better with part of their way of doing things surviving in the merged airline, compared to being gobbled up by a bigger player like easyJet and seeing their brand identity, aircraft and seniorities wiped under the carpet.
nobody has ever died from hard work, but why take the risk?
 
f4f3a
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 10:43 am

I can't see u2 buying them. If they wanted monarch they could have bought them when they were last up for sale.
Easyjet won't want the max order doesn't fit . The only useful addition would be monarch engineering which they
Sometimes use. Everything else they can do themselves. If iag bought them for veuling would give them space at Luton and the power to cheaply cancel the max order. I think it would be a risky move for jet2 to purchase them they do what they do well and have a niche in the uk market.
 
Ryanair01
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 1:46 pm

Quoting BestWestern (Reply 7):
What does Monarch offer easyjet that they cannot do themselves?

I guess a reason Easyjet might be interested is to stop someone else, potentially a strong player, gaining a foothold in some of the major bases.

Monarch has been a comparitively weak competitor for sometime, yes they are now profitable largely on the back of cheap fuel, but I'd have thought new 737-9s will cost much more to lease, increasing their costs somewhat. So I can see why the venture capitalists will be looking to get out.

Monarch struggles to get true value out of their route network when compared to the major LCCs, who have become masters of attracting origin passengers from both ends of each route and attracting 'some' business travellers. Monarch is very much a Brits going abroad leisure airline meaning they don't really compete in every demographic against Easyjet.

So, from Easyjet's viewpoint stopping an airline like Norwegian or Vueling taking Monarch over and truly competing in each demographic at each end of every route, 'might' make them worth a look from a defensive viewpoint.

Having said that, I agree that U2 would have bought them last time were they enthusiastic for doing so. I think for U2, Monarch in their current form sort of bumping along somehow avoiding oblivion is probably their favoured outcome.

[Edited 2016-03-28 06:49:20]
 
gilesdavies
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 2:20 pm

Quoting BestWestern (Reply 7):
What does Monarch offer easyjet that they cannot do themselves?

Primarily the Slots at LGW, as Monarch base approximately 10 aircraft there. Gatwick's runway is at capacity and this is the only way easyJet can really grow.

From what I can gather easyJet have about 56 aircraft based at LGW and this would offer them about 15-20% growth, if they could gain the Monarch slots. easyJet have stated many times that this is their most profitable base and hence why I think they would be keen to grow the base further.

Luton is both airlines headquarters, and easyJet have outgrown the hangar 89 offices, and there is limited space to build new offices on the airport site, so could take over the Monarch offices which are quite large with three or four floors. Monarch Engineering also have hangars at the airport and this would offer easyJet further facilities for maintenance.

easyJet have agreed to significantly grow the Luton base where there are currently around 20 aircraft based, but aircraft stands are currently limited until the expansion of the airport is complete. Monarch have 5 aircraft based there, so this gives easyJet the immediate opportunity to grow the base by 25%.

Even though Monarch are intending to replace the Airbus fleet, the current fleet are compatiable with easyJet's. Also it gives easyJet the opportunity to fly the larger A321 on busy routes from airports which are slot restraint.

Plus easyJet immediately get the opportunity to quash the competition on quite a few routes they overlap on, especially to the likes of Spain, Portugal and Cyprus. Plus they get immediate access to a significant base at BHX where Monarch base about 8 aircraft, and they hardly have any presence in this region of the UK, and they can grow the current MAN base by a similar number of aircraft.

Quoting IBA346 (Reply 5):
I wonder if IAG would be interested in merging Monarch with Vueling's small but rapidly growing UK operations.

That is a very interesting thought...

IAG could split the takeover betwen BA and a UK Vueling base... They could grow BA, out of LGW, seeing as they can't grow out of LHR and offer a mix of new Long/Short Haul routes, especially with new 789's and A350's due imminently.

Vueling also seems to have taken a liking to LTN, with this year alone starting new routes to AMS, BCN, FLR and ZRH. They could easily grow, by taking over the Monarch base.

Monarch's current A320/1's are compatiable with IAGs fleets too!

I think the cancellation of the 737MAX order is looking inevitable, regardless of who takes ZB over. This also a key factor I think Greybull want out, as they don't want to be the people incurring the cost of these new aircraft, while the A320's are currently performing well.
 
anjin
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 2:35 pm

I could see either Easy or Jet2 interested. Easy would just swallow them up, Jet2 a southern presence and strong brand.
Many years ago at Excalibur we were owned by 3i and Air Malta . That ended in tears also ......
 
f4f3a
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 2:40 pm

I don't think easyjet want monarchs a321 as they operated gb a321 and then got rid. If they want a321
They would be new ones along wizz are config. I think it's true that a reason would be to stop others
Getting slots. A lot of speculation at the moment on easyjet buying out other airlines at the moment. It will be very
Interesting to see. I have to say though that it does not look good for the monarch brand as no one mentioned would
Be likely to keep it going . It will be very sad to see another long serving brand go.
 
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FlyCaledonian
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RE: Greybull Looking To Sell Monarch?

Mon Mar 28, 2016 10:36 pm

I wonder if easyJet could run into issues with the competition authorities, being the strongest player at LGW. IAG might not object if there was the possibility of some slot divestures they could potentially take advantage of, but equally so could others.

IAG themselves might be interested as a way of grwoing UK regional bases. As others have said, a merger into Vueling would give a good growth opportunity. Also potential to switch some of the A321s to BA at LHR if necessary, with some A320s moving the other way. You can also redeem Avios on Monarch flights - whilst not a reason in itself for IAG to purchase ZB, IAG will have an idea how popular ZB is with Avios customers so might be a factor.

Jet2 would be an interesting one. Would certainly give them a greater presence in the South and give them additional scale within the UK. I wonder which brand would survive in such a merger though?

Norwegian could also be a possibility. Would be a way to demonstrate some commitment to LGW, especially given their comments about basing 150+ aircraft there should a second runway happen.

Would Ryanair be an outside bet? Not sure what they would gain and acquisitions haven't really been there thing - the most recente being STN based Buzz.

I think we can rule out Thomson and Thomas Cook. I can't see either wanting to add Monarch now that it is largely a scheduled operation.
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GCT64
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RE: Greybull Looking To Sell Monarch?

Tue Mar 29, 2016 10:21 am

Quoting FlyCaledonian (Reply 14):
I wonder if easyJet could run into issues with the competition authorities, being the strongest player at LGW.

I suspect competition authorities would look at it from the perspective of LON O&D rather than LGW O&D, in which case I don't think U2 would have any issues.

Losing one operator from, say, LGW-BCN is not going to materially affect competition in the busy LON-BCN market.
Flown in: A20N,A21N,A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,A359,A388,BA11,BU31,(..56 more types..),VC10,WESX
 
gilesdavies
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RE: Greybull Looking To Sell Monarch?

Tue Mar 29, 2016 12:01 pm

Monarch Airlines are today denying the airline is for sale:

www.travelmole.com/news_feature.php?news_id=2021401&c=setreg&region=2
 
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OA260
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RE: Greybull Looking To Sell Monarch?

Tue Mar 29, 2016 12:04 pm

Quoting gilesdavies (Reply 16):
Monarch Airlines are today denying the airline is for sale:

Well as we know thats the usual reply. EI did the same about IAG etc...

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