‘Hanging by a thread’

Workers and passengers alike awoke to the heart-breaking news this morning (October 2) that the airline Monarch, in operation for nearly 50 years, has gone into administration and has cancelled all its scheduled flights.

About 2,100 workers — of which 1,800 are Unite members working in engineering and as cabin crew — now face an uncertain future.

The UK will now begin its biggest peacetime repatriation, as the Civil Aviation Authority is tasked by the government with bringing more than 100,000 passengers with cancelled flights back home to the UK on specially chartered flights at no additional cost.

Monarch has said that it will work with unions Unite and Balpa to secure work for staff who’ve lost their jobs as quickly as possible.

Unite has slammed the UK government for sitting idly by as the beleaguered airline, which enjoyed a good reputation for customer service for several decades, went under amid Brexit uncertainty and two of its largest markets – Tunisia and Egypt – collapsing after the Foreign Office advised against travel there because of previous terrorist incidents.

Unrest in Turkey also meant demand for another of Monarch’s popular destinations had plummeted. A flood of available seats in Portugal and Spain, which formed its core business, meant prices fell steeply and in the end, these cheap fares were no longer sustainable for Monarch, which was sold to investment firm Greybull Capital in 2014.

The fall in the value of the pound after the EU referendum was another huge blow to the company because fuel and aircraft are purchased in dollars, which left Monarch paying ÂŁ50m more on these costs than last year.

Unite has highlighted, however, that the government still has a role to play in supporting the thousands of people who’ve lost their jobs.

“Monarch’s workforce has worked tirelessly and loyally, with great sacrifice, to try and turn the airline around in the last year,” said Unite national officer Oliver Richardson.

“Their hard work has been undone by a government seemingly content to sit on its hands and allow one of the UK’s oldest airlines go into administration,” he added.

“There were a number of factors that impacted negatively on the company, however continuing uncertainty surrounding Brexit and the ability of UK airlines to fly freely in Europe after the UK has left the EU, undoubtedly hindered Monarch getting the investment it needed to restructure and survive.”

Open skies

This EU ‘open skies’ agreement now enables airlines in each member state to fly without restrictions in other EU member states – post-Brexit this agreement is under threat and Unite has long warned that failure to secure a new agreement would be disastrous.

The clock is now ticking and further delays will only compound uncertainty for UK airlines. With airlines selling flights a year in advance, an open skies agreement needs to be in place by March 2018 ahead of the UK’s exit from the European Union in March 2019.

Earlier this year, Richardson said that the UK government “must secure these current freedoms for UK airlines as a matter of urgency in upcoming Brexit negotiations to ease job fears and stabilise confidence in the industry.

“A failure to do so, risks airlines moving their headquarters and operating under ‘flags of convenience’ in a move which will hurt jobs and slash funding for the Civil Aviation Authority which gets much of its money from airlines registered in the UK,” he added.

Unite understands that the government had denied Monarch’s request when it asked for a ‘bridging loan’ at commercial rates, so it could tide the company over as the company sought to focus on its long-haul business and in the process stabilise itself.

“This uncertainty combined with the apparent unwillingness of the government to assist at commercial rates and at a profit to the taxpayer, has left thousands of jobs at a great British airline hanging by a thread,” Richardson argued.

“Now is not the time for government ministers to wash their hands of a problem they have contributed to.”

“Ministers need to act fast by intervening in a similar way as their German counterparts did with Air Berlin and help secure a future for Monarch,” Richardson noted, highlighting the fact that the German government did provide the ailing Air Berlin a €150m bridging loan that now enables it to operate throughout the summer as its assets are sold and workers are given time to find new jobs.

“The government must also secure the current freedoms to fly that UK airlines enjoy in Brexit negotiations as a matter of urgency to stabilise confidence in the airline industry,” Richardson reiterated Unite’s key demand.

“In the meantime Unite will be working day and night to support and assist our members at Monarch through this deeply upsetting and unsettling time.”