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Over on PPRuNe there is talk of United upgrading to a 787?
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Dobbo
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Trying to strike a positive note in light of the slow moving disaster that appears to be Monarch.
TATL is perhaps not the bloodbath we suspected. Seems like VS are reasonably pleased with their performance this summer, there is the UA story above aaaand there is speculation on another forum that CLT might return to MAN via AA.
This was an ex US route which, per one poster, failed because the 757 was unable to carry a full cargo and passenger load. Likely seasonal, but if anything came to pass it would be an interesting change of tact by AA following the JFK withdrawal.
Not sure what aircraft are based at CLT, but hopefully they won't have the same issues as experienced at ORD!
TATL is perhaps not the bloodbath we suspected. Seems like VS are reasonably pleased with their performance this summer, there is the UA story above aaaand there is speculation on another forum that CLT might return to MAN via AA.
This was an ex US route which, per one poster, failed because the 757 was unable to carry a full cargo and passenger load. Likely seasonal, but if anything came to pass it would be an interesting change of tact by AA following the JFK withdrawal.
Not sure what aircraft are based at CLT, but hopefully they won't have the same issues as experienced at ORD!
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CLT is a mostly hub traffic as far as l know so there isn't going to be much point 2 point on that route. I know recently my cousin used it from LHR with AA to get to Orlando but MAN has that well covered. If they do open up CLT then they must believe there will be enough onward connecting traffic to sustain it.
In the aftermath of the tragic collapse of Monarch Airlines, Manchester Airport and the airlines serving it face a number of crucial decisions going forward. Minds will have been exercised in airline and airport boardrooms across the country (and beyond) as strategic plans are put into action in response to this crisis.
Of course, the business world is ruthless and unforgiving. Crisis for one company spells major opportunity for others. Court Line, Intasun / Air Europe, Globespan, XL Group, BMI Baby ... the demise of all these brands spelt heartbreak for their employees but a chance for surviving companies to grow and prosper in the vacuum left behind. Now it is Monarch's turn to exit the stage and make way for the next generation of success.
So, what does all this mean from a Manchester Airport perspective? Monarch's based fleet consisted of 7 x A321 and 2 x A320. All nine aircraft flew intensively, and generally with high load factors. So at face value, Manchester ideally needs to replace nine based units and around 1.5 million passengers per year. How realistic is this? On the plus side, Monarch had very few unduplicated MAN routes. Zagreb and Verona spring to mind ... both my recent Zagreb flights were packed, so maybe an opportunity for someone like EasyJet there? And Verona ... Lake Garda will never go out of fashion.
Well, first we have to acknowledge some really tough home truths. There is a very good reason why Monarch Airlines failed. Angry people will call out management failings and Greybull Capital, but the reality is that Monarch had become a business which couldn't limp on without regular infusions of fresh cash to burn. It's been rinse and repeat for years now. Monarch had become a "me too" player in the UK short-haul leisure market, a battleground littered with overcapacity and uneconomic yields. Many of Monarch's competitors enjoyed advantages which they didn't share: lower operating costs, more diverse networks, less exposure to the Med. Monarch had little room to manoeuvre into new markets and no pricing power to charge economic fares on it's core routes. Every option open to them meant bleeding more red ink. This sad ending had become inevitable. If anything, the biggest surprise is that Greybull put up more money at ATOL-renewal time twelve months ago. The truth is we had a bonus year out of Monarch Airlines. And Greybull - to their credit - threw alot of money into providing that lifeline. They tried to put a viable deal together during that reprieve year. But it just proved too big an ask.
Meanwhile, both Norwegian International and Vueling Airlines muscled into these same crowded markets from MAN. And around a year later promptly withdrew again. That is very telling about the state of the market. These two couldn't make Manchester to the Med resorts work either. The margins aren't there. Vueling has now retrenched to its daily service between MAN and its hub at BCN. Norwegian is back on the Scandinavian routes. Monarch tell us that in 2017 they flew 14% more passengers but took £100m less in fares. Losses were estimated at £60m for 2017, with projections showing that the loss would rise to £100m in 2018. The show couldn't go on.
In the light of the above, one thing is very clear. The market from Manchester to the Med resorts is likely to support significantly fewer seats going forward. Yes, we can point to high load factors, but it is yield which really matters. The question now is where is the equilibrium between two key numbers: total 2017 Manchester short-haul leisure capacity, and that number minus the programmes of Monarch, Norwegian and Vueling. I don't expect to see all of that shortfall made good, but hopefully some of it can be.
Who are the key players left behind in this market segment? I would say principally Jet2.com, EasyJet, Ryanair, Thomas Cook, TUI UK (Thomson). And there is a case for including IAG as well. But how much will each contribute to filling the void ... it is in nobody's interests to swamp the market again. Higher fares will be the goal.
Unfortunately, the answer isn't a simple one. There are complicating factors beyond the obvious which will restrict the response of some of these carriers. Yes, attractive slots and overnight aircraft parking positions have just come free at MAN. So run in there and make your land-grab, right? But it isn't so straightforward. Similar slots have just come free at LGW (big draw!), LTN and BHX. But for companies like EasyJet, Ryanair and IAG these are not the only selection boxes which have suddenly been flung open. They must also consider Dusseldorf and Berlin Tegel (Air Berlin legacy), Roma Fiumicino and Milano Linate (Alitalia). Bagging those slots is really attractive too. With GBP/EUR exchange rates, those continental slots could be seen as a better short-term bet by some. And unfortunately, carriers can't just magic up more aeroplanes to fill these slots. They have a finite pool and must disperse their fleets wisely.
But perhaps it is Manchester Airport itself which throws up the biggest roadblock of all. Monarch Airlines operated out of Terminal 2. And that is where the new vacancies have arisen. Now that is a major headache for most. The exception is TUI Airlines UK (Thomson). Should they opt to add a frame or two at MAN they're well placed to do so. It should be no problem for them as a T2 incumbent. But TUI is a notoriously cautious company anyway ... we'd probably see only very modest expansion from them, and they (TUI) are also amongst the best placed to soak up former Air Berlin opportunities in their native Germany. Our other likely players are Ryanair in T3, and EasyJet, Jet2.com and Thomas Cook over in T1. And therein lies a huge problem.
Ryanair loves it's T3 home at MAN. Even though they're bulked out at nine based aircraft. They can't just add frames at T3, and it seems inconceivable that they'd go for a split-terminal operation. They could very easily be physically unable to grow at MAN. And in that case the news could get worse for MAN: their route to expanding on core leisure routes such as AGP, PMI, ALC, FAO etc. could be to swap out more niche routes to other airports such as LPL, LBA and EMA. MAG's enduring failure to address the Ryanair T3 squeeze really risks coming back to bite here.
Over at T1 the picture isn't much better. EasyJet, Jet2 and Thomas Cook go a long way to bulking out that terminal as well. They can't just add unlimited frames even if they wanted to. In an ideal world, MAG would persuade one of these 'Big 3' to switch across to T2. But who will be up for that? Especially during the earliest phases of TP disruption. Would any of them consider a short-term split-terminal operation until 'TP Pier 1' is completed? Thomas Cook appears out of the question ... they need T1's widebody stands. An EasyJet switch would be physically doable, but I'm not sure that the airline would perceive any advantage to them in this. Pier B stands suit their needs well. Jet2 enjoys almost bespoke facilities in T1 with their own check-in and security hall. But their extensive use of remote parking makes them the best possibility of accepting some kind of short-term flexible arrangement using bussing etc. And my guess is that Jet 2, probably the most directly advantaged by Monarch's sad plight, would be the company most likely to expand capacity. They also don't have the distraction of managing bases in Germany and Italy etc.
So, as we see, issues such as distribution of carriers by terminal will also have a major role to play in the recovery at MAN. Other wildcards could include the response from IAG. They have been looking to expand the niche CityFlyer E190 programme. And we shouldn't absolutely rule out the possibility of the Vueling brand trying again, although they may not be keen after a difficult 2017 season in the Manchester short-haul leisure bunfight. However, the one glimmer of hope here is that an entrant such as Vueling (or even Norwegian) could be told you get the slots and the overnight parking positions if you're prepared to switch to T2.
There will be lots more to wrap our heads around as all this unfolds. But consider some other silver linings (from the point of view of the competition). Thomas Cook and Virgin have just sidestepped the planned advent of a new no-frills North Atlantic challenger in Monarch Mk2. They must be privately jubilant. But the loudest cheers must surely be coming from Primera Air who have seemingly dodged a bullet (or a cannonball?) at BHX.
Meanwhile, the one bit of good news which we do have is that Monarch Airlines Engineering Limited (MAEL) survives. A high quality operation accounting for many skilled jobs. They shouldn't be a difficult asset to sell. Good luck to all involved with them going forward.
Observations and discussions welcome.
Of course, the business world is ruthless and unforgiving. Crisis for one company spells major opportunity for others. Court Line, Intasun / Air Europe, Globespan, XL Group, BMI Baby ... the demise of all these brands spelt heartbreak for their employees but a chance for surviving companies to grow and prosper in the vacuum left behind. Now it is Monarch's turn to exit the stage and make way for the next generation of success.
So, what does all this mean from a Manchester Airport perspective? Monarch's based fleet consisted of 7 x A321 and 2 x A320. All nine aircraft flew intensively, and generally with high load factors. So at face value, Manchester ideally needs to replace nine based units and around 1.5 million passengers per year. How realistic is this? On the plus side, Monarch had very few unduplicated MAN routes. Zagreb and Verona spring to mind ... both my recent Zagreb flights were packed, so maybe an opportunity for someone like EasyJet there? And Verona ... Lake Garda will never go out of fashion.
Well, first we have to acknowledge some really tough home truths. There is a very good reason why Monarch Airlines failed. Angry people will call out management failings and Greybull Capital, but the reality is that Monarch had become a business which couldn't limp on without regular infusions of fresh cash to burn. It's been rinse and repeat for years now. Monarch had become a "me too" player in the UK short-haul leisure market, a battleground littered with overcapacity and uneconomic yields. Many of Monarch's competitors enjoyed advantages which they didn't share: lower operating costs, more diverse networks, less exposure to the Med. Monarch had little room to manoeuvre into new markets and no pricing power to charge economic fares on it's core routes. Every option open to them meant bleeding more red ink. This sad ending had become inevitable. If anything, the biggest surprise is that Greybull put up more money at ATOL-renewal time twelve months ago. The truth is we had a bonus year out of Monarch Airlines. And Greybull - to their credit - threw alot of money into providing that lifeline. They tried to put a viable deal together during that reprieve year. But it just proved too big an ask.
Meanwhile, both Norwegian International and Vueling Airlines muscled into these same crowded markets from MAN. And around a year later promptly withdrew again. That is very telling about the state of the market. These two couldn't make Manchester to the Med resorts work either. The margins aren't there. Vueling has now retrenched to its daily service between MAN and its hub at BCN. Norwegian is back on the Scandinavian routes. Monarch tell us that in 2017 they flew 14% more passengers but took £100m less in fares. Losses were estimated at £60m for 2017, with projections showing that the loss would rise to £100m in 2018. The show couldn't go on.
In the light of the above, one thing is very clear. The market from Manchester to the Med resorts is likely to support significantly fewer seats going forward. Yes, we can point to high load factors, but it is yield which really matters. The question now is where is the equilibrium between two key numbers: total 2017 Manchester short-haul leisure capacity, and that number minus the programmes of Monarch, Norwegian and Vueling. I don't expect to see all of that shortfall made good, but hopefully some of it can be.
Who are the key players left behind in this market segment? I would say principally Jet2.com, EasyJet, Ryanair, Thomas Cook, TUI UK (Thomson). And there is a case for including IAG as well. But how much will each contribute to filling the void ... it is in nobody's interests to swamp the market again. Higher fares will be the goal.
Unfortunately, the answer isn't a simple one. There are complicating factors beyond the obvious which will restrict the response of some of these carriers. Yes, attractive slots and overnight aircraft parking positions have just come free at MAN. So run in there and make your land-grab, right? But it isn't so straightforward. Similar slots have just come free at LGW (big draw!), LTN and BHX. But for companies like EasyJet, Ryanair and IAG these are not the only selection boxes which have suddenly been flung open. They must also consider Dusseldorf and Berlin Tegel (Air Berlin legacy), Roma Fiumicino and Milano Linate (Alitalia). Bagging those slots is really attractive too. With GBP/EUR exchange rates, those continental slots could be seen as a better short-term bet by some. And unfortunately, carriers can't just magic up more aeroplanes to fill these slots. They have a finite pool and must disperse their fleets wisely.
But perhaps it is Manchester Airport itself which throws up the biggest roadblock of all. Monarch Airlines operated out of Terminal 2. And that is where the new vacancies have arisen. Now that is a major headache for most. The exception is TUI Airlines UK (Thomson). Should they opt to add a frame or two at MAN they're well placed to do so. It should be no problem for them as a T2 incumbent. But TUI is a notoriously cautious company anyway ... we'd probably see only very modest expansion from them, and they (TUI) are also amongst the best placed to soak up former Air Berlin opportunities in their native Germany. Our other likely players are Ryanair in T3, and EasyJet, Jet2.com and Thomas Cook over in T1. And therein lies a huge problem.
Ryanair loves it's T3 home at MAN. Even though they're bulked out at nine based aircraft. They can't just add frames at T3, and it seems inconceivable that they'd go for a split-terminal operation. They could very easily be physically unable to grow at MAN. And in that case the news could get worse for MAN: their route to expanding on core leisure routes such as AGP, PMI, ALC, FAO etc. could be to swap out more niche routes to other airports such as LPL, LBA and EMA. MAG's enduring failure to address the Ryanair T3 squeeze really risks coming back to bite here.
Over at T1 the picture isn't much better. EasyJet, Jet2 and Thomas Cook go a long way to bulking out that terminal as well. They can't just add unlimited frames even if they wanted to. In an ideal world, MAG would persuade one of these 'Big 3' to switch across to T2. But who will be up for that? Especially during the earliest phases of TP disruption. Would any of them consider a short-term split-terminal operation until 'TP Pier 1' is completed? Thomas Cook appears out of the question ... they need T1's widebody stands. An EasyJet switch would be physically doable, but I'm not sure that the airline would perceive any advantage to them in this. Pier B stands suit their needs well. Jet2 enjoys almost bespoke facilities in T1 with their own check-in and security hall. But their extensive use of remote parking makes them the best possibility of accepting some kind of short-term flexible arrangement using bussing etc. And my guess is that Jet 2, probably the most directly advantaged by Monarch's sad plight, would be the company most likely to expand capacity. They also don't have the distraction of managing bases in Germany and Italy etc.
So, as we see, issues such as distribution of carriers by terminal will also have a major role to play in the recovery at MAN. Other wildcards could include the response from IAG. They have been looking to expand the niche CityFlyer E190 programme. And we shouldn't absolutely rule out the possibility of the Vueling brand trying again, although they may not be keen after a difficult 2017 season in the Manchester short-haul leisure bunfight. However, the one glimmer of hope here is that an entrant such as Vueling (or even Norwegian) could be told you get the slots and the overnight parking positions if you're prepared to switch to T2.
There will be lots more to wrap our heads around as all this unfolds. But consider some other silver linings (from the point of view of the competition). Thomas Cook and Virgin have just sidestepped the planned advent of a new no-frills North Atlantic challenger in Monarch Mk2. They must be privately jubilant. But the loudest cheers must surely be coming from Primera Air who have seemingly dodged a bullet (or a cannonball?) at BHX.
Meanwhile, the one bit of good news which we do have is that Monarch Airlines Engineering Limited (MAEL) survives. A high quality operation accounting for many skilled jobs. They shouldn't be a difficult asset to sell. Good luck to all involved with them going forward.
Observations and discussions welcome.
- Admin
- #1,608
Thank you for giving us such an in depth insight into the future likelihood of airline expansion to take-up some of the void left by Monarch. Certainly interesting times ahead.
Dobbo
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- Oct 27, 2015
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And a very relevant conversation to have. Its sad that Monarch as a business has failed, but there are opportunities to redeploy its assets - particularly the staff - and we hope these opportunities will be taken.
EasyJet seems the one with the most synergies across the board, but at MAN there is the T1/T2 issue discussed above. Perhaps Vueling would be well placed at MAN, but elsewhere? Obviously the aircraft/crews/slots/employees are likely to be spread across a number of carriers, but it will be interesting to see how much of Monarch is transferred into new ownership. I don't expect all of it will, but hopefully a large percentage of it will...
EasyJet seems the one with the most synergies across the board, but at MAN there is the T1/T2 issue discussed above. Perhaps Vueling would be well placed at MAN, but elsewhere? Obviously the aircraft/crews/slots/employees are likely to be spread across a number of carriers, but it will be interesting to see how much of Monarch is transferred into new ownership. I don't expect all of it will, but hopefully a large percentage of it will...
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As has already been said by Aviator, the summary by EGGC_MAN is very detailed and gives a good insight into the problems that face Manchester over the coming months.
The next few weeks/months will be interesting.
The next few weeks/months will be interesting.
David_itl
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- Jan 31, 2016
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It does sound a bit churlish but this may ease a bit of pressure on T2 this winter with fewer aircraft ops to interfere with construction work. How tempting it would be for MAN to see if any of the construction companies they've employed could ramp up employment to see how much work could be done over the next 6 months or so.
easyJet maybe the one to look for the likes of Lisbon, Zagreb and Stockholm to be added with perhaps an addtional weekly service to the Spanish/Portuguese resorts
easyJet maybe the one to look for the likes of Lisbon, Zagreb and Stockholm to be added with perhaps an addtional weekly service to the Spanish/Portuguese resorts
Coathanger16
Well-Known Member
Good analysis of this latest event. Just a few points to pick up on:
The media (and I think EGGC_MAN touched upon it) have said one of the issues for Monarch was overcapacity. Is that really the case though? As its been highlighted, many of Monarch's flights were going out full. As you mentioned, it is the yield that makes all the difference. Consider that on some routes you had as many as 8 airlines operating (EZY, RYR, JET2, MON, NOR, VLG, TCX, TOM), and these compete with each other by offering cheaper and cheaper prices. If there were less airlines operating the same number of flights, would yields be better? Like him or loath him, but WW has repeatedly stated there is a lot of room for consolidation across Europe - that is looking a more likely prospect with Air Berlin, Alitalia and now Monarch.
You're other point about Monarch freeing up capacity at T2 and which, if any, airlines would fill it - until recently, EasyJet had split terminal operations at their biggest base at Gatwick. If they managed that for many years there, wouldn't it be feasible to do the same at Manchester? Especially as Ryanair are constrained at T3, it may give EasyJet the advantage to expand.
The media (and I think EGGC_MAN touched upon it) have said one of the issues for Monarch was overcapacity. Is that really the case though? As its been highlighted, many of Monarch's flights were going out full. As you mentioned, it is the yield that makes all the difference. Consider that on some routes you had as many as 8 airlines operating (EZY, RYR, JET2, MON, NOR, VLG, TCX, TOM), and these compete with each other by offering cheaper and cheaper prices. If there were less airlines operating the same number of flights, would yields be better? Like him or loath him, but WW has repeatedly stated there is a lot of room for consolidation across Europe - that is looking a more likely prospect with Air Berlin, Alitalia and now Monarch.
You're other point about Monarch freeing up capacity at T2 and which, if any, airlines would fill it - until recently, EasyJet had split terminal operations at their biggest base at Gatwick. If they managed that for many years there, wouldn't it be feasible to do the same at Manchester? Especially as Ryanair are constrained at T3, it may give EasyJet the advantage to expand.
Yes, excellent analysis by EGCC_MAN.
Just a thought about reallocation of terminals if some of the lost MON capacity were made up by one or more of the other airlines.
As has been said, easyjet split their operations at LGW and I can see merit in the Jet2 suggestion of moving to T2 with greater use of busing stands as they have more based a/c. However, could TCX split their short haul and long haul ops. with short haul moving to T2. How many based a/c do they currently have for s/h flights? Is there much/any transfer traffic between s/h and l/h? Just a thought.
Just a thought about reallocation of terminals if some of the lost MON capacity were made up by one or more of the other airlines.
As has been said, easyjet split their operations at LGW and I can see merit in the Jet2 suggestion of moving to T2 with greater use of busing stands as they have more based a/c. However, could TCX split their short haul and long haul ops. with short haul moving to T2. How many based a/c do they currently have for s/h flights? Is there much/any transfer traffic between s/h and l/h? Just a thought.
Coathanger16
Well-Known Member
Further to that point, could some of the smaller carriers at T2 move to T1? Along with the gap Monarch have left, might that provide enough room for a T1 airline to move all their operations to T2?
Alternatively, as I think someone else suggested, could MAG use the spare capacity at T2 to progress the TP quicker?
User001
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- Jul 16, 2015
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Jet2 already announced Verona to start next year some time ago. Zagreb and Kittila (on a scheduled basis) are the only 2 routes that now go unserved ex-MAN.
Croatian were interested in starting MAN-ZAG this summer until MON announced it, so time to knock on their door again?
As for the others, I am aware of Easyjet plans to add 3 aircraft next summer instead of one, making 15 based. Lots of cabin crew in the holding pools are being called with a January 30th start date on permanent contracts, after being told that Easyjet 'had the numbers for 2018' so we're not being offered MAN positions. They had a split terminal operation at Gatwick for many years, so, it's not completely unconceivable that they could do so at MAN until T2 is ready to take them in their entirety later on?
Croatian were interested in starting MAN-ZAG this summer until MON announced it, so time to knock on their door again?
As for the others, I am aware of Easyjet plans to add 3 aircraft next summer instead of one, making 15 based. Lots of cabin crew in the holding pools are being called with a January 30th start date on permanent contracts, after being told that Easyjet 'had the numbers for 2018' so we're not being offered MAN positions. They had a split terminal operation at Gatwick for many years, so, it's not completely unconceivable that they could do so at MAN until T2 is ready to take them in their entirety later on?
User001
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- Jul 16, 2015
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Strong indications Croatian Airlines will introduce a 3 weekly Zagreb link from May 2018.
They were on the verge of adding it this summer, but then Monarch jumped on the route, prompting Croatian to think again.
They initially met MAN at routes 2015 with the proposal, so good to see some of the capacity and routes being added back in.
This will mean that after the collapse of Monarch, only one route will be unserved, which is Kittila. The destination is served by Charters, but Monarch offered the only scheduled service.
They were on the verge of adding it this summer, but then Monarch jumped on the route, prompting Croatian to think again.
They initially met MAN at routes 2015 with the proposal, so good to see some of the capacity and routes being added back in.
This will mean that after the collapse of Monarch, only one route will be unserved, which is Kittila. The destination is served by Charters, but Monarch offered the only scheduled service.
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