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Travel industry news

05 Oct 2018

BY James Chapple


Monarch engineering arm rebuts reports of winding-up proceedings

Monarch’s engineering arm, retained after its parent airline collapsed last year, could itself now face liquidation, it has been revealed.

Monarch jet at terminal

Monarch engineering arm reportedly facing winding-up order

Sky News reports Monarch Aircraft Engineering (MAEL), which continued operating despite the demise of Monarch Airlines last October, is bracing for a winding-up petition from the tax office.

A winding-up petition could give way to a compulsory liquidation order, which would see the firm broken up and its assets sold before being dissolved.

Monarch Airlines fell spectacularly into administration this time last year, leaving 110,000 passengers stranded overseas and sparking the largest peacetime repatriation programme in British history.

According to Sky, HMRC is preparing to take action against MAEL over an unpaid tax bill.

The company employs more than 800 and provides vital engineering services to the aviation sector in Britain, working with a range of airlines.

MAEL though says it has not been served or made subject to a winding-up petition or order, or “any other form of administration or insolvency process”.

Not only do the reports come exactly a year after the Monarch Airlines failure, it comes the same week Primera Aid also filed for bankruptcy, ceasing all operations at midnight on Tuesday (October 2).


Current ownership structure 'unsustainable'

Current ownership structure 'unsustainable'

In a statement, MAEL says it has "successfully stabilised operations" and "transitioned to a stand-alone business" following the Monarch Airlines failure.


According to MAEL, it has established itself as a independent aircraft maintenance company and strengthened its customer base through new contracts with a number of "leading airlines".


"The company’s maintenance facilities at Luton and Birmingham are now fully utilised and operating at maximum capacity, with contracted work stretching throughout 2019," said MAEL.


"In the last year, MAEL has increased its geographical footprint with the opening of a new component maintenance facility in Northampton, and has created more than 100 new jobs, growing its workforce to more than 800 people. It has also doubled the size of its industry-renowned apprentice scheme."


However, the firm says it is making "good progress" with Monarch administrator KPMG to agree a new ownership structure, which it says is "unsustainable" in the medium to long-term.


Any such deal, MAEL says, will strengthen its balance sheet and resolve any "legacy issues". The deal could be agreed by the end of the month.


Chris Dare, MAEL chief executive, said: “I’m proud of what we have achieved in the last 12 months. We have stabilised our operations and grown our business significantly. Our teams and employees have done remarkable work.


“I’m excited about our future potential and this process is the final phase in the journey to go from being a division of Monarch Group to a successful, standalone entity. We have enjoyed strong support from our key stakeholders which has been so important as we complete our journey.”

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