Sky News has learnt that International Airlines Group has expressed an interest in acquiring some of Monarch’s take-off and landing slots, fleet and crew – raising hopes that some jobs can be salvaged if the UK’s fifth-biggest airline does collapse into administration.
Sources said that the Civil Aviation Authority (CAA), which granted Monarch a 24-hour ATOL extension on Saturday, was considering whether to sanction a repeat even without significant new assurances about the company’s long-term finances.
The ATOL-licensed division of Monarch accounts for only 5% of the group’s revenues, with insiders expecting KPMG to be appointed as administrator to that part of the business as early as Monday.
An update is expected from the CAA relating to the ATOL licence not long before midnight on Sunday.
A further 24-hour extension is possible but far from guaranteed, sources said on Sunday.
If the CAA calls time on Monarch’s package holiday licence, its ability to continue trading as an airline will then depend upon retaining the confidence of customers, airports and key suppliers – with directors anticipating a “contagion effect” which could trigger the collapse of the whole company.
Roughly 100,000 Monarch customers are currently abroad, with many facing uncertainty about their journey back to the UK.
The Sunday Times reported that a fleet of Qatar Airways planes had been lined up by the CAA to help repatriate Monarch customers.
Sources told Sky News on Saturday that the regulator had struggled to source aircraft because US officials had commandeered many of the available planes to evacuate people from the hurricane-ravaged Caribbean.
KPMG, which has been working with Monarch on exploring sale or partnership options for its troubled short-haul network in recent weeks, has been leading increasingly urgent talks with prospective buyers, including easyJet, Wizz Air and Norwegian Air Shuttle.
The emergence of IAG, which declined to comment, as a suitor, is likely to raise hopes that at least some of Monarch’s flight crews will see their jobs salvaged.
Industry sources believe, though, that at least hundreds of jobs face being lost if the company’s demise is sealed.
Thomas Cook and other package holiday providers are also understood to have been approached by Monarch’s advisers in an attempt to gauge appetite for its assets.
Roughly 2800 people work for Monarch, with about 800 employed by its engineering business – a division which is likely to be able to continue trading under another owner.
The company had been expected to fly more than 6m passengers this year from airports including London Gatwick, Birmingham, Leeds and Manchester, as well as its base at Luton Airport.
Last year, Monarch required a 12-day extension before its ATOL was renewed by the CAA, with controlling shareholder Greybull Capital orchestrating a £165m rescue package.
Boeing also contributed to that deal by allowing Monarch to enter into sale-and-leaseback arrangements for a fleet of new planes, which had been expected to come into service from next spring.
The turmoil in the aviation industry has caused a brutal downturn in Monarch’s performance, with currency weakness and a string of terrorist attacks in Europe contributing to its troubles.
SOURCE, Sky News/Yahoo