Rising uncertainty amongst UK’s budget airlines
Low-cost airlines have always been popular in the UK, with many people having benefitted from cheap flights over the years. However, this month thousands of travellers have been caught up in Ryanair’s flight cancellation fiasco as well as Monarch’s collapse into administration.
Last minute flight prices have risen almost quarter in the wake of the chaos surrounding the two UK airlines. So far, it has affected over two million passengers, with many desperately looking for alternative deals elsewhere.
Last week, Monarch, the UK’s fifth largest airline finally filed for administration after several years of uncertainty. As a result, around 1,800 employees were made redundant overnight (approximately 90% of the Monarch workforce). Just over 200 members of staff were kept on temporarily by the airline to deal with the administration process.
Since the announcement from Monarch Airlines, a union named Unite claimed that the way that Monarch went into administration meant that the former workers had a strong claim for compensation. According to UK law, companies that exceed 100 employees must give at least 45 days of notice when it comes to redundancy.
Passengers turned up to the airport on the day to find that their flights had been cancelled and many have struggled to receive compensation since. Over 110,000 customers were brought back to the UK on chartered planes and an additional 750,000 people found their upcoming trips cancelled.
Monarch bosses have blamed the airline’s collapse on issues that were out of their control – mainly terrorism and the tumbling pound after EU referendum. The growing threat of terrorism has led to in-demand routes to Egypt and Tunisia to be closed off, creating more competition amongst airlines for the popular routes between the UK to Spain.
Over the last year, Monarch spent an additional £50 million to cover the rising cost of fuel and the aircraft itself. Although the number of passengers grew 14% from the year before, the firm was experiencing losses of around £100 million.
As Monarch Airlines ceases trading, Ryanair is attempting to steady the ship after issues with rota change resulting in a shortage of pilots. In a letter, Ryanair chief executive, Michael O’Leary apologised to pilots for failing to plan enough leave and offered improved conditions and a better salary to prevent them from leaving the firm.
With over 18,000 flights already cancelled over the winter season, the pressure is mounting for the budget airline. Could this just be the beginning of Ryanair’s problems?