UK leisure carrier Monarch Airlines has entered administration and its air operator’s certificate (AOC) and flights have been suspended, marking the UK’s largest ever airline collapse.

On Oct. 2, the UK CAA confirmed that the airline, which been in business since 1967, has gone into bankruptcy.

Monarch fell into administration after a turbulent two years during which many of its holiday destinations such as Turkey, Egypt and Tunisia were disrupted by terrorism, which caused a downturn in bookings.European  Airlines and holidaymakers turned instead to more traditional holiday resorts in Spain and Portugal, where there is ferocious LCC competition.

In recent years, Monarch made a switch from charter to scheduled flights and in 2014 was sold by the founding Swiss Mantegazza family to a UK private equity company, Greybull Capital.

The airline had a fleet of around 35 Airbus A320-family aircraft, most of them A321s. All were leased. Days after it was acquired by Greybull, it placed an order for 30 Boeing 737 MAX 8s, and exercised an option for a further 15 in June this year. The new aircraft were scheduled to start arriving in 2018.

Around a year ago, rumors circulated that the company was in financial problems and Greybull pumped in additional cash.

“The third airline failure this year in Europe, after Alitalia and Air Berlin, is a symptom of over-capacity and overly-aggressive pricing,” ETX Capital market analyst Neil Wilson said, talking to the BBC on Oct. 2.

Phone calls to Monarch’s offices went unanswered. A CAA spokesman told ATW that the UK government had asked CAA to organize a rescue operation for passengers stranded overseas after reports began circulating in recent weeks that Monarch was in financial difficulties.

That operation has been launched to bring back some 110,000 passengers, who are stranded overseas on holidays, using around 30 aircraft chartered from a series of European and Middle East carriers. Aircraft – mainly narrowbodies such as A320 and Boeing 737-family types – have been brought in from carriers as far afield as Qatar Airways.

The rescue operation will continue for two weeks, which should cover the vast majority of Monarch passengers currently abroad, the CAA spokesman said. Anyone out of the UK for periods longer than two weeks should contact the CAA, he added. CAA would discuss that with the UK government’s Department for Transport.

“This is the biggest UK airline ever to cease trading, so the government has asked the CAA to support Monarch customers currently abroad to get back to the UK at the end of their holiday at no extra cost to them,” UK CAA CEO Andrew Haines said in a statement.

“We are putting together, at very short notice and for a period of two weeks, what is effectively one of the UK's largest airlines to manage this task.  The scale and challenge of this operation means that some disruption is inevitable. We ask customers to bear with us as we work around the clock to bring everyone home.

“We urge people affected by the company’s collapse to check our dedicated website monarch.caa.co.uk for advice and information on flights back to the UK.  It also gives information to those passengers that have future bookings with Monarch but are yet to leave the UK.”

The Luton London-based group’s engineering operation, Monarch Aircraft Engineering Limited, is not in administration and continues to trade normally.

Alan Dron alandron@adepteditorial.co.uk