Monarch Airlines has become the UK’s largest-ever airline bankruptcy.
The budget airline ceased trading this morning after emergency talks with the Civil Aviation Authority (CAA) to renew its license to sell package holidays failed. As a result, 300,000 future bookings with the company have been cancelled, and over 100,000 passengers are currently overseas with return flights to the UK now grounded.
The British government asked the CAA to begin an “unprecedented” process of bringing stranded passengers back to the UK. Transport minister Chris Grayling said that it will be the country’s “biggest ever peacetime repatriation.”
He expressed sympathy with both passengers and employees of Monarch, adding that the airline is a victim of a “price war in the Mediterranean.” The airline blamed its struggles on reduced demand for travel to key summer destinations in Egypt, Tunisia, and Turkey following high-profile terror attacks in recent years.
Low-cost German rival Air Berlin filed for bankruptcy in August, suffering from a similar set of problems.
According to the BBC, Monarch chief executive Andrew Swaffield said that the airline recorded a 14% rise in passengers this year, but falling prices meant that it generated £100 million ($133 million) less revenue. Administrator KPMG said that increased operating costs as a result of the weakened pound compounded the airline’s troubles.
In its last full fiscal year, Monarch made a pre-tax loss of nearly £300 million. Last year, the airline’s majority owner bailed out the struggling company with a £165 million capital injection.
Last year, Monarch Airlines—which was founded in 1967—flew more than 6 million passengers to 40 destinations in Europe, Africa, and the Middle East. It was due to collect the first planes of a big order of new Boeing 737s in early 2018; the airline expanded its order, from 30 to 45, in June. The order was a “clear illustration of confidence in Monarch’s future success,” Swaffield said at the time.