Monarch Airlines seeks funding amid cash squeeze fears

Monarch said it was operating as normal despite speculation. Picture: Dave Thompson/PA Wire

Monarch said it was operating as normal despite speculation. Picture: Dave Thompson/PA Wire

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The owner of Monarch Airlines is talking with various parties about a potential takeover of the carrier as it flagged up a “significant investment” within days amid fears the 50-year-old airline is teetering close to collapse.

Greybull Capital is understood to be in talks with Chinese firm HNA Group, the company behind Hainan Airlines, about a potential deal, with others thought to be waiting in the wings.

Monarch was yesterday forced to deny “negative speculation” on social media over the weekend that it is in financial trouble.

A spokesman for Luton-based Monarch said: “Our flights are operating as normal, carrying Monarch passengers as scheduled.

“To weather tougher market conditions and to fund its ongoing growth, Monarch expects to announce a significant investment from its stakeholders in the coming days.”

The company said security concerns and the devaluation of the pound after the UK’s Brexit vote had made market conditions tougher. However, it said that it remained on track to post underlying earnings of more than £40 million for the year to end-October 2016.

The firm made a £19.2m pre-tax profit in the year to October 2015 following a £57.3m loss a year earlier, according to accounts filed at Companies House.

Greybull, which acquired a controlling stake in Monarch in 2014, is thought to be finalising details of a cash injection over the coming days.

Part of the money is expected to go towards helping pay for a new fleet of 30 Boeing MAX 8s. Monarch employs about 2,800 people, and has a strong exposure to Egypt and north Africa.

Aviation analyst Alex Macheras said: “Out of all the carriers we have in the UK it wouldn’t surprise me if Monarch were to declare bankruptcy, purely because we’ve known that they’ve been in such a fragile state for so long.”

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