September 28, 2017 / 2:43 PM / in 23 days

Holiday carrier Monarch Airlines says talking to potential partners

LONDON, Sept 28 (Reuters) - Britain’s Monarch Airlines, grappling with competition from low-cost rivals, said on Thursday it was talking to potential partners after a report that parts of its short-haul network would be sold.

Sky News reported that easyJet and Wizz Air had bid for parts of Monarch’s short-haul network, but the airline said it had no news to announce yet.

Monarch, which predominantly flies to holiday destinations, said it was undertaking a review of its business.

“We are having regular discussions on a number of options with potential strategic partners and we will announce any material developments, if and when they happen,” Monarch said in a statement.

The move comes as tough competition in the airlines sector puts pressure on weaker carriers and drives consolidation. Air Berlin and Alitalia have both filed for insolvency this year and are seeking new investors for parts of their business.

EasyJet is already interested in picking up about 27-30 planes, including associated slots and crew at Berlin airport, from insolvent Air Berlin, an administrator for the German airline said this week.

Analysts at HSBC said easyJet would likely be interested in Monarch’s Gatwick and Luton slots, both airports where it is a major carrier.

“easyJet’s opportunism makes sense given Monarch’s footprint at easyJet bases,” analysts at Credit Suisse said in a note, saying the move for Air Berlin showed easyJet’s ambition to make a move if slots in its key bases became available.

A year ago, Monarch secured a 165 million pound ($221.50 million) lifeline from majority shareholder Greybull Capital, enabling the carrier to renew its Air Travel Operator’s Licence (ATOL) licence.

With its ATOL due to expire on Sunday, analysts at Credit Suisse said they expected further developments could be imminent.

A spokesman for Wizz Air declined to comment on the Sky report, while easyJet was not immediately available for comment.

$1 = 0.7449 pounds Reporting by Alistair Smout; Editing by Elaine Hardcastle

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