Monarch latest: Pound sterling slump has delayed a £165m cash injection to save airline, says chief executive

Exclusive: Airline boss says deadline extension was needed to finalise investment

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The Independent Online

In his first interview since the rescue of Monarch was announced, the airline’s chief executive has said that the slump in sterling had delayed the announcement of a £165m cash injection.

Andrew Swaffield told The Independent that he had asked the Civil Aviation Authority for a 12-day extension on its Air Travel Organiser’s Licence (ATOL) to allow time to put together the recapitalisation. 

On 30 September, less than four hours before the ATOL was due to expire, the extension was granted.

A £165 million investment from its majority shareholder, Greybull Capital, was announced on the final day of that extension.

“I’ve had easier two weeks,” said Mr Swaffield.

He said that negotiations for a cash injection were so protracted because of the range of issues facing the airline. They include the continued ban on flights to Sharm el Sheikh and the fall in demand for Turkey because of fears over terrorism.

“With these issues and the collapse in the pound we need to time to assess what our long-term capital needs would be.

“These kinds of deals are complex, and ordinarily we would rather do that outside the glare of publicity.”

Mr Swaffield said he expected the next few years to be “challenging” because of strong competition and resulting low fares, and continued concern about terrorism. He does not anticipate a significant strengthening in the pound. Most of Monarch’s earnings are in sterling, but many of its costs are in US dollars. 

The airline will replace its ageing Airbus fleet with Boeing 737 MAX aircraft. 

“They will give us 22 per cent fuel savings. At present we spend £120m on fuel each year.”

He also said that he intended to increase the percentage of seats sold through the firm’s tour operator, Monarch Holidays.