EASYJET PLC Monarch, in which Greybull Capital agreed to invest 125 million pound in October, has cut staff numbers and pay and is reducing its fleet to 34 aircraft from 42 in a bid to bring its costs closer to those of rivals Ryanair (>> Ryanair Holdings plc) and easyJet (>> easyJet plc).
The airline, which targets sun-seeking Britons, is expecting losses of 169 million pounds after restructuring costs in 2014, but forecasts operating profit somewhere between 10 million and 100 million pounds in 2015.
"It's clearly going to be a substantial turnaround from the loss-making 2014," Chief Financial Officer Barry Nightingale told Reuters. "But we are not yet able to predict whether it is going to be a low or high double-digit."
Airlines across the world are benefiting from lower oil prices, which have fallen by over 50 percent in six months.
But some industry experts and analysts have raised concerns that cheap oil might be propping up some ailing airlines.
Chief Executive Andrew Swaffield said Monarch was enjoying the tailwind from lower fuel costs but that the restructuring plan was designed when oil prices were around $90 a barrel.
"The business plan was designed to deliver profitability even at prices higher than $90," he said.
Unlike Ryanair and easyJet, Swaffield said, Monarch was not interested in chasing business travellers.
"We're not focusing on high-frequency city pairs, we are focused on longer leisure routes flying Brits to the sun."
(Reporting by Victoria Bryan; Editing by Mark Heinrich)
