* British holiday airline saved by cash injection
* Funding came hours before deadline to renew ATOL licence
* Major shareholder agrees $205 million equity deal
(Adds CEO comments)
By Paul Sandle
LONDON, Oct 12 British airline Monarch
secured a 165 million pound ($205 million) lifeline from
majority shareholder Greybull Capital on Wednesday, enabling the
low-cost carrier to renew a key operating licence and fund new
The equity investment was agreed only hours before its
operating licence was due to expire, allowing the airline, which
sells flights and package holidays to tourist destinations, to
The 48-year-old airline said the investment would fund the
replacement of its Airbus jets with more fuel-efficient Boeing
737 MAX-8 aircraft between 2018 and 2021.
Monarch warned in September that security concerns and the
devaluation of the pound after Britain's vote to leave the EU in
June had made market conditions difficult.
Based at the southern English airport of Luton, Monarch has
been hit by a decline in the popularity of destinations in
Tunisia, Egypt and Turkey due to security concerns. The carrier
mainly sells holidays and flights to Spain, Italy and France.
Larger budget airline easyJet warned last week that
annual profit had fallen by more than a quarter and hinted that
trading would remain tough.
Monarch Chief Executive Andrew Swaffield said he now had
"real confidence" about his airline's future despite the current
The fall in the pound had increased fuel and leasing costs
paid in dollars and navigation and ground handling costs paid in
euros, Swaffield said, adding that security concerns were also a
The combined impact would cut profit this year to about 40
million pounds from more than 70 million pounds last year.
"We believe the market is going to remain fairly challenging
over the next few years, particularly related to terrorism and
the weak pound," he said on Wednesday.
Questions about Monarch's finances were raised last month,
forcing the carrier to say it was operating normally.
Days later, Britain's aviation regulator, the CAA, said it
had until 2259 GMT on Oct. 12 to satisfy the requirements needed
for a full Air Travel Organiser's Licence (ATOL).
Swaffield said airline bookings had been relatively
unaffected by the deadline, but there had been a "dampening" in
holiday sales in recent weeks.
He said sales were already returning to normal, and he was
confident the weaker pound would not hit consumer demand.
"People very quickly re-align to a new exchange rate," he
said. "The British are resilient when it come to holidays."
($1 = 0.8042 pounds)
(Editing by Keith Weir)