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Travel industry news

04 Jan 2019

BY Tom Parry

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TRFBLI

Monarch engineering arm enters administration

Monarch Airline’s engineering arm, retained after its parent airline collapsed in 2017, has been placed in administration.

Monarch jet at terminal

Work at Monarch Aircraft Engineering’s (MAEL) base maintenance business, which carries out aircraft overhaul and maintenance programmes, is to be suspended immediately and around 250 employees have been made redundant.

 

A further 200 members of staff based at its Luton headquarters will also be made redundant, with 83 retained temporarily to support the winding down of the company.

 

Established in 1967, MAEL employs approximately 553 staff across the UK and Europe, providing services across four main divisions – base maintenance, line maintenance, fleet technical support (Continuing Airworthiness Management Organisation – CAMO) and a training academy.

 

MAEL’s CAMO business and the company’s training academy are still in operation and have been put up for sale.

 

David Pike, joint administrator and restructuring partner at KPMG, said MAEL had tried to grow its customer base following the collapse of Monarch Airlines in October 2017, although “the company inherited significant debts and claims [from the airline]”.

 

“Every effort has been made to turnaround the business, including launching a CVA [Company Voluntary Agreements, to pay creditors over a fixed period] which sought to resolve these legacy debts. Unfortunately, following the CVA, a number of customers reduced or sought to terminate their relationship with MAEL, further adversely impacting the business,” Pike said.

 

“As a result, MAEL recently entered into talks with a number of potential parties with a view to selling all or parts of the business. While it is pleasing agreements with a number of operators have been secured to ensure continuity of service at the majority of MAEL’s line maintenance stations, with only partial offers forthcoming for the rest of the business, the directors have taken the difficult step to appoint administrators.”

 

MAEL announced 182 jobs had been saved after its line maintenance operations at Gatwick, Birmingham, East Midlands, Newcastle and Glasgow airports were transferred to Morson Group.

 

Its Luton-based line maintenance operations have transferred to Storm Aviation, while operations at Manchester and Birmingham will be transferred to Flybe and certain Gatwick-based employees transferred to Boeing.

 

“We remain hopeful that buyers will be found for the CAMO and training businesses and encourage any interested parties to get in contact,” added Pike.

 

“We will also be making every effort to provide support to those employees who have been affected by redundancy. As following the failure of the airline, employment fairs will be held in the coming days in Luton and Birmingham, to help these employees secure new roles.”

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