Monarch Completes Boeing Buy Following Restructuring

A week after securing new ownership and a much needed capital infusion, the UK’s Monarch Airlines finalized an order for 30 Boeing 737 Max 8s worth more than $3.2 billion at current list prices, Boeing announced Friday. The order, originally announced at the Farnborough International Airshow in July, includes options for another fifteen 737 Max 8s and marks the beginning of the British carrier’s transition to an all-Boeing single-aisle fleet.

On October 24, Monarch Airlines and other parts of UK leisure travel group Monarch Holdings completed a restructuring program and sale of 90 percent of the group to Greybull Capital under which it secured £125 million ($200 million) of permanent capital and liquidity facilities.

Immediately after the deal closed, the UK Civil Aviation Authority renewed the group’s operating license.

Greybull assumes control of Monarch from the Mantegazza family after the former owners agreed to pay £30 million ($48 million) toward reducing the company’s substantial pension plan deficit. Other concessions came from employees, including an agreement to accept pay reductions of up to 30 percent. The company also announced 700 “redundancies,” two-thirds of which it said were voluntary.

Monarch now plans to “optimize” its fleet to 34 aircraft from 42 and end all long-haul and charter flying by April, leaving a network of short-haul leisure routes structured to increase average frequencies, aircraft use, productivity and profitability. Plans call for the closure of Monarch’s base at East Midlands Airport next summer, resulting in a five-base network concentrated at London Gatwick, Manchester, Birmingham, London Luton and Leeds-Bradford.

Monarch expects to take delivery of its thirty 737 Max 8s over two years starting in 2018, giving it a uniform fleet of Boeing narrowbodies by the end of 2020.