Monarch Aircraft Engineering appoints KPMG administrators
KPMG has been installed as the administrator for Monarch Aircraft Engineering, having already performed a similar role for the entity’s connected airline in 2017. The professional services firm will now work towards finding a buyer for the firm’s assets to safeguard jobs.
In 2017, Britain’s longest-surviving airline, Monarch, was placed into administration, causing chaos to British travellers across the world. Domestically, passengers arrived at airports only to find their flights cancelled and holiday plans inconvenienced, while many abroad were left stranded with no means of returning to the UK. As a result, 30 specially chartered aircraft were requested to carry out what constituted the largest peacetime repatriation in British history, as hundreds of thousands of travellers were marooned on foreign soil.
Big Four firm KPMG was appointed to oversee the winding up of the airline, as well as of the Monarch Travel Group more generally. At the time it was reported that by the end of proceedings, 2,100 Monarch employees were likely to have lost their jobs, despite sources claiming the CEO of Monarch initially giving assurances that jobs would be secured. Now, 16 months later, KPMG has once again been installed to administrate a final piece of the Monarch brand.
The engineering arm of the collapsed airline has gone bust with the loss of 408 jobs. Monarch Aircraft Engineering is "unsustainable in its present form", according to administrators from KPMG, after attempts to restructure the firm – taken over in October by Greybull Capital – had failed. Greybull has been at the heart of a number of other low-cost takeovers involving struggling UK firms, perhaps most notably the broader Monarch Airlines group, prior to its collapse.
David Pike, Restructuring Partner at KPMG, said, "Following the administration of other Monarch entities in 2017, Monarch Aircraft Engineering sought to build its customer base to replace the loss of business from the former airline. Through the insolvency of the airline however, the company inherited significant debts and claims. Every effort has been made to turn around the business, including launching a CVA which sought to resolve these legacy debts. Unfortunately, following the CVA, a number of customers reduced or sought to terminate their relationship with Monarch Aircraft Engineering, further adversely impacting the business."
Founded in 1967, Monarch Aircraft Engineering employed about 579 staff across the UK and Europe, and KPMG reported it has already made headway to safeguarding these staff. The group’s line maintenance operations at Gatwick, Birmingham, East Midlands, Newcastle and Glasgow Airports will be largely transferred to Morson Group, with the Luton Airport operations transferring to Storm Aviation, and a number of Gatwick-based employees have transferred to Boeing. At the same time, further operations at Manchester and Birmingham Airports, including related employees, were transferred to Flybe, saving 182 jobs.
Buyers are still being sought for the CAMO division, which focuses on the upkeep of airworthiness records, scheduled maintenance requirements, and Monarch Aircraft Engineering’s training academy. Meanwhile, UK union Unite has since accused Luton airport-based Monarch Aircraft Engineering of failing to consult employees.
Regional Officer Paul Bouch, said, "This is terrible news and a terrible way to start the new year for a group of highly skilled workers. Unite will be offering our maximum support to help those affected by this announcement. Unite will also be seeking an urgent meeting with the administrators KPMG and launching legal action on behalf of our members for compensation over a failure to consult."
