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Sancho Panza

Monarch Staff Agree To Pay Cuts Of Up To 30% To Save Their Jobs

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Bloomberg 24/9/14

'Monarch Group said employees spanning pilots to engineers agreed to contract changes and pay cuts of as much as 30 percent, paving the way for a planned takeover of the U.K. short-haul airline by Greybull Capital LLP.

An average of more than 90 percent of workers across all units backed the concessions, a day after Greybull was announced as the preferred bidder to buy Monarch from the Mantegazza family, the Luton, England-based company said in a statement.

“Today’s news that staff accept changes to their terms and conditions, including considerable reductions in salaries, is a further, significant step in our efforts to complete our proposed transaction,” Chief Executive Officer Andrew Swaffield said. “We have also secured major agreements with aircraft lessors and commitments on future investment from Greybull.”

Subject to further negotiations with Greybull, a family-owned investment firm, a sale should be completed by the end of October, Swaffield said. The British Airline Pilots’ Association and Unite, which represents cabin crew and engineers, said they’d backed pay cuts to protect the company’s 3,200 jobs.

Monarch, which carriers 7 million passengers a year and owns the Cosmos holiday brand, is part-way through a plan to move from being a charter carrier to a scheduled operator focused on low-cost travel, which it said on Aug. 15 should be completed next summer. The company announced a $3.1 billion order for 30 Boeing Co. (BA) 737 Max 8 jets at the Farnborough Air Show, with the narrow-bodies due for delivery starting in 2018.'

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I think people are choosing to go on cruises more, rather than fly. No more flying out and getting drunk at the bars and night clubs.

Carnival CCL (London and New York listed) beat analyst expectations.

http://tickerreport.com/banking-finance/302893/carnival-co-ccl-issues-q4-earnings-guidance/

There are more flights to Euro destinations than ever - Spain has had its best year ever for tourist arrivals.

The problem for Monarch is that ever increasing numbers are using Ryanair or Easy jet and then arranging their own accommodation, whether it be airbnb or a chalet. Which is why Monarch is trying to change from a charter carrier to a low cost schedule operator.

Seems a bit risky to take on Ryanair - unless they can offer things Ryanair don't eg cheap changing of flight, low price for checked in luggage etc.

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It's one thing ground crew who work the ticket desk getting a paycut and getting slack at their job. The guys who deal with the planes though I'd want on the right wages.

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Bloomberg 24/9/14

'Monarch Group said employees spanning pilots to engineers agreed to contract changes and pay cuts of as much as 30 percent, paving the way for a planned takeover of the U.K. short-haul airline by Greybull Capital LLP.

An average of more than 90 percent of workers across all units backed the concessions, a day after Greybull was announced as the preferred bidder to buy Monarch from the Mantegazza family, the Luton, England-based company said in a statement.

“Today’s news that staff accept changes to their terms and conditions, including considerable reductions in salaries, is a further, significant step in our efforts to complete our proposed transaction,” Chief Executive Officer Andrew Swaffield said. “We have also secured major agreements with aircraft lessors and commitments on future investment from Greybull.”

Subject to further negotiations with Greybull, a family-owned investment firm, a sale should be completed by the end of October, Swaffield said. The British Airline Pilots’ Association and Unite, which represents cabin crew and engineers, said they’d backed pay cuts to protect the company’s 3,200 jobs.

Monarch, which carriers 7 million passengers a year and owns the Cosmos holiday brand, is part-way through a plan to move from being a charter carrier to a scheduled operator focused on low-cost travel, which it said on Aug. 15 should be completed next summer. The company announced a $3.1 billion order for 30 Boeing Co. (BA) 737 Max 8 jets at the Farnborough Air Show, with the narrow-bodies due for delivery starting in 2018.'

"....paving the way for a planned takeover of the U.K. short-haul airline by Greybull Capital LLP........a family-owned investment firm"

Hmmmm.....is this a euphemism for yet another vulture private equity firm? Any bets that in a few years at most Monarch does become history - whilst these apparent saviours walk off into the sunset with millions in profit? Another Phones4U in the making?

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Capital flight, this has avoided the terminal and maybe they will get a soft landing

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If you were working then a salary cut and then time to look for alternative employment would be prefereable to instant job loss and job searching when all your ex-colleagues are doing the same.

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Senior management are taking a circa 30% paycut. We are told it includes the board, but I'd expect this is probably smoke and mirrors....

Doubtful.You need pilots to make money.Board members are a large and sometimes unnecessary (operationally) cost.I was talking to a friend who works for a US private equity outfit last week and he said they were beyond ruthless.

He also said the job market had turned down recently-he's an FD-as they've been advertising jobs below him and he was getting some good quality ex CEO's/FD's putting in for them.

I think people are choosing to go on cruises more, rather than fly. No more flying out and getting drunk at the bars and night clubs.

Carnival CCL (London and New York listed) beat analyst expectations.

http://tickerreport.com/banking-finance/302893/carnival-co-ccl-issues-q4-earnings-guidance/

'The company provided EPS guidance of $0.15-0.19 for the period, compared to the Thomson Reuters consensus EPS estimate of $0.21,'

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I'd pick Monarch over Ryanair every time. Ryanair is a hellish experience.

I have to say that I use Flybe regularly and they are superb and cheap.

"....paving the way for a planned takeover of the U.K. short-haul airline by Greybull Capital LLP........a family-owned investment firm"

Hmmmm.....is this a euphemism for yet another vulture private equity firm? Any bets that in a few years at most Monarch does become history - whilst these apparent saviours walk off into the sunset with millions in profit? Another Phones4U in the making?

I suspect the bondholders/banks who got bitten with that £250mn dividend will be trying not to make the same mistake twice.

Although in this bizarro taxpayer funded banmking world,it might be part of the plan.

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'Family'. Yeah. Everyone has been born. That is probably nearer the truth.

EDIT: Involved in the Comet crash. Was this the one where they let the stores burn and kept hold of the warranty business to run down for big profits?

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9653526/US-investors-pulled-support-from-Comet.html

EDIT2: Ahh yes. Bought Comet for £2 and giveb a £50m dowry. Removed working capital at short notice which tripped Comet into administration. HAL, Opcapita and Greybull made off like bandits whilst staff, warranty holders and unsecured creditors raped.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10243396/Comet-backers-recoup-54m-from-retailer.html

I would start looking into Monarch now Vincey baby - before it all happens. The staffers and creditors are being played.

Good work Hottie.

'The private equity advisory firm, which also owned MFI, has been heavily criticised for allowing the retailer to collapse and positioning itself as a leading secured creditor.' lulz...as they say.

Edited by Sancho Panza

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Large part of Monarch value (have no idea of actual figures) is in their MRO facilities I believe. Going on what happened at Comet, the asset stripping occured at the point of purchase, wait to see terms if there is any chance to see Monarch fly. One thing for sure, different situation to a retailer, dealing with professionals generally who have to maintain standards and level of responsibility, ****** these people over and they will be gone in a flash and there will be nothing of any tangible value left.

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The tyranny of airport security has put many people off in my opinion. Flying anywhere is a dreadful experience.

I've had pretty much the same disposable income for many years, but have cut down hugely on the amount of foreign travel for this very reason.

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Doubtful.You need pilots to make money.Board members are a large and sometimes unnecessary (operationally) cost.I was talking to a friend who works for a US private equity outfit last week and he said they were beyond ruthless.

He also said the job market had turned down recently-he's an FD-as they've been advertising jobs below him and he was getting some good quality ex CEO's/FD's putting in for them.

'The company provided EPS guidance of $0.15-0.19 for the period, compared to the Thomson Reuters consensus EPS estimate of $0.21,'

people prefer not to be strip searched at airports.

And what makes an excellent board member in an airline?...they sell tickets, they load and fly passengers, rinse and repeat.

All they have to do is make sure it all works, that they do it cheaper than the competition, and negotiate the right deals.

Invoice out for more than you invoice in. simples.

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Councils should have taken this hit in 2009 - 25% cut for middle and senior council staff, then a sliding scale for lower paid staff.

indeed, 50% cut for all salary and emoluments over 25K.

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