by Hugh Morris, The Telegraph, October 2, 2017
Monarch passengers are being told not to travel to the airport after the airline went into administration, leading to the cancellation of 300,000 future bookings. Here we explain what affected travellers need to know.
What has happened to Monarch?
The airline, founded in 1967, has ceased trading. Almost a year after the carrier was given a £165million bailout, when it appeared to be teetering on the brink, the airline and holiday operater has folded.
Monarch, the UK’s fifth largest airline, nearly saw its operator licence expire on Saturday before it was given a 24-hour extension – but that has not been renewed.
The impact of terror attacks in key holiday markets, including Egypt and Turkey, the fall in the value of the pound following last year's vote for Brexit, and stiff competition in the low-cost carrier market are understood to be behind the company’s downfall.
The CAA said it started drawing up contingency plans for Monarch’s collapse four weeks ago.
How many people are affected?
In addition to the 300,000 future bookings now invalidated, the Government and Civil Aviation Authority (CAA) are working to bring home 110,000 holidaymakers currently abroad - most on the Costa del Sol - an unprecedented number, according to the CAA.
“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,” said CAA chief executive Andrew Haines. “We know that Monarch’s decision to stop trading will be very distressing for all of its customers and employees.”
It is believed Monarch staff turned up to work at airports across the UK this morning in uniform only to be told that the airline was no more. In 2016, Monarch flew 5.4 million passengers on 35,619 flights.
I’m on holiday with Monarch – how will I get home?
Customers abroad have been urged to contact the CAA (or visit monarch.caa.co.uk), which is making alternative arrangements, but should be able to finish their holiday. They will return to Britain on a different airline, almost certainly at a different time, and may be forced to fly back to a different UK airport.
It said: “If you are currently abroad and due to return to the UK on or before October 15 we are making arrangements for you to return home to the UK on a new flight, at the end of your holiday. These new flights will be at no extra cost to you.
“We will of course prioritise vulnerable passengers, including unaccompanied minors, and make sure that family groups travel on the same flights.”
The CAA said details of passengers’ new flights will be published a minimum of 48 hours in advance of the original departure time. Details are published on the regulator’s “my new flight back to the UK ” page.
The last Monarch flight to land arrived at Manchester from Tel Aviv on Monday morning. From now on, passengers will use aircraft sourced by the CAA from other airlines, including Qatar Airways, easyJet and Air Transat. Rescue flights have already begun, with information from FlightRadar showing a Qatar Airways A320 bringing passengers home from Ibiza. More than 30 aircraft will be chartered by the CAA.
As Monarch also sold package holidays, there will be customers missing out on more than just flights. Fortunately, those who have booked package holidays through the operator should be protected by the Government's Atol scheme. I’m due to take a package holiday with Monarch – will I get my money back?
However, those booked to fly with Monarch via another tour operator, such as Thomson or Thomas Cook, will likely be catered for by the operator who will source an alternative aircraft or flight. Contact your operator to check the latest information.
The CAA explains: “The Atol scheme aims to protect you from losing money or experiencing difficulties abroad if the travel company you booked with held an Atol and stops trading. You may be able to make a claim under the scheme if:
- You have booked a trip that you are due to take in the future, but the Atol holder has since stopped trading.
- The Atol holder has stopped trading while you are abroad, meaning your trip has been disrupted or your flight back to the UK cancelled.
It advises those booked on a future trip to check their Atol certificate as it explains who is protecting their trip and what to do to claim. It adds that customers will be required to complete a form. It says: “We aim to refund you for the unused Atol-protected parts of your trip.”
Regarding those customers on package holidays abroad, the CAA says: “We will do everything possible to ensure you can finish and enjoy your trip without disruption.”
It advises customers to call +44 (0) 333 103 6350 for more information or check the Atol failures page, though it does not appear to have been updated.
The CAA estimated that around 50 per cent of the customers affected would have “some form of Atol protection”, with up to 20 per cent having booked direct through Monarch and the remainder having booked through other tour operators that afford Atol protection.
It is understood other tour operators, such as Thomas Cook, could take on peoples’ lost bookings under a scheme called a “deed of reassignment”, whereby instead of customers getting refunds, they would be given the opportunity to book onto a different holiday by another operator. However, this is down to the discretion of individual companies.
I’ve bought a flight with Monarch – what are my rights?
As above, those booked onto flights are part of a package holiday will be protected by the Atol scheme and will be able claim the cost back on any unused flights.
KPMG, the auditors, said customers yet to travel “may be able to claim a refund from their credit or debit card provider”, adding that “non-Atol protected customers may be able to claim for additional costs, such as additional accommodation, from their credit card provider”.
Those who paid by credit card will be protected by Section 75 of the Consumer Credit Act 1979, which covers for payments made between £100 and £30,000, but it only works if you booked direct with Monarch.
Customers may also be able to apply to their travel insurers. However, many will not cover for airline insolvencies.
Can I claim compensation?
No. The collapse of an airline is not covered by EU legislation on flight compensation.
Where does Monarch fly?
Andrew Haines of the CAA said Palma, Malaga, Alicante and Lanzarote are the focuses of the operation to bring home Monarch customers, destinations indicative of the airline’s focus on the western Mediterranean.
The airline covered 43 cities and resorts from its operating bases across the UK, including Birmingham, Manchester and Leeds Bradford as well as Gatwick and Luton. That the majority of the airline’s aircraft were at Birmingham (11), Manchester (nine) and Gatwick (10) on Monday morning showed how important the regional holiday market was to its business.
Monarch had its most destinations in Spain, from Alicante to Tenerife, where it was usually competing with Europe's major carriers such as Ryanair and Easyjet. It also served Porto, Lisbon, Madeira and Faro in Portugal.
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It flew year-round to Larnaca in Cyprus, Rome and Zagreb, while offering seasonal routes to a host of summer hotspots, including Paphos, Rhodes and Antalya. It also served winter holiday routes to the likes of Grenoble in France and Innsbruck in Austria.
It previously served a number of destinations in Egypt, including Sharm el-Sheikh, but cancelled them in the wake of the instability in the country. The same, too, was true of Tunisia.
Other airlines are likely to pick up some of the 5.4million Monarch customers in the near future, while Wizz Air has already announced it is offering anyone with a cancelled flight to Tel Aviv “rescue fares of £119”. It said for anyone with details of their original booking to the Israeli city to contact Wizz Air for travel up to December 5.
How many other firms have gone bust this year? Have more gone under than usual?
Beyond the most notable collapses there have been few more. The CAA is in the process of updatings its “latest failures” page, but once refreshed will only include Monarch.
Low Cost Holidays went under last July, stranding 27,000 customers abroad and invalidating 110,000 forward bookings. More concerning was that the Spain-based operator was not covered by the UK’s Atol scheme and nor was it a member of respectable travel organisations Abta or Aito. The operator was offering cut-price deals just hours before it collapse.
Telegraph Travel’s consumer expert Nick Trend said the collapse was a sign of the economic uncertainty surrounding Brexit exacerbated by continued terror attacks and instability in Europe.
Another operator to succumb in similar circumstances was Northern Cyprus and Turkey specialist Anatolian Sky, which collapsed in July last year. The Midlands-based operator folded just days after a terrorist attack on Istanbul’s Ataturk Airport which killed 42 people, though the reasons behind its downfall were more long-term.
“We have been under pressure since the regional political problems started in the past few years and intensified last year and this year. Turkey has been under attack by regional terrorism and by global powers. Every new attack has had a devastating effect on the company,” managing director Akin Koc said at the time.
What is Atol - and how can I ensure my holiday is protected?
Nick Trend has written extensively on what holidaymakers can do to ensure they are best protected from operator collapses.
It can be boiled down to three key tips.
Book using a credit card.
If you book flights using a credit card (or a Visa debit card) and the cost is over £100, the card issuer is liable for any loss, and you can apply for a refund.
Get good insurance.
Some travel insurance policies offer cover for the failure of an airline or other travel supplier. This is often referred to as Scheduled Airline Failure Insurance (SAFI). The level of this protection varies. The travel insurance policy I buy – Travel Plus from PJ Hayman ( travelplusinsurance.co.uk) – offers cover up to £2,500, not only for loss on air tickets and extra cost of replacing flights, but also for items such as a villa deposit, which you may lose if you can’t travel because of the airline’s failure . Check with your provider if it offers SAFI cover — it may be an optional extra. Alternatively, buy a policy from a specialist insurer like protectmyholiday.com that covers the flight alone.
If you have booked through an ATOL (caa.co.uk/atol-protection) travel agent or tour operator you also have some protection. If the airline collapses, the travel company must either provide other flights; get you home if you are stranded; or give you a full refund. For this cover to be valid, you need written confirmation that you are ATOL protected when you booked.
See here for a full guide to Atol protection.
What will Brexit mean for holiday protection?
From summer next year, Atol will be extended to cover accommodation and car hire bookings made online, off the back of a flight booking. That is to say if you book a flight, and the website directs you to other companies offering additional services, this will now become defined as a “package” and therefore protect by Atol, whereas previously they were definited as individual parts and not afforded the same protection.
The new legislation - and indeed the original Atol scheme - is the product of an EU directive, and one, like all other EU law, that must be sifted through to determine what is retained once the UK leaves the EU.
It is assumed such vital protection for holidaymakers is too important for the Government to allow to lapse in the wake of Brexit, however, the details are currently far from clear.
The same is true of the oft-employed EU legislation on flight delays that delivers passengers let down by their airline compensation up to €600 (£529) and refunds and reroutings in the event of a cancellation.
This article was written by Hugh Morris from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
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