The closure of Sharm el Sheikh, plummeting demand for Turkey and the collapse of sterling has been blamed for a sharp fall in Monarch Group’s projected profits.
Chief executive Andrew Swaffield said the three factors had contributed to a fall in projected 2016 pre-tax profits, which are set to dip from £74 million in 2015 to £48 million this year. The final result will be made public next summer.
“The main impact for us was the closure of Sharm, which was about 10% of our revenue and that is out of our programme permanently now,” he said. Swaffield added that a reduction in demand of 65% for Turkey, terrorism and the fall in the value of the pound following the Brexit result had all contributed.
“Like all airlines, we have dollar and euro costs and we take 85% of our revenue in sterling, so for us, a weakening pound is bad news, without any increase in benefits. The collapse in the pound after the vote was the most damaging thing, but economically, Brexit has not had an impact.”
The CAA has now allowed Monarch to sell seat-only fares without an Atol following a £165 million cash injection from major shareholder Greybull Capital. “We are now back to normal,” Swaffield said, who added that he did not think consumers “had been particularly aware” of the issue.