Monarch Airlines: Ryanair and rivals circle as airline crash-lands into administration

Opportunistic rivals on Monday ran the rule over the wreckage of the collapsed Monarch airline and holidays business as the low-cost operator went bust, with 2100 jobs at risk.

Irish airline Ryanair was expected to poach some of its 400 pilots to sort out its short-term staffing problems, which have seen it cancel thousands of winter services in the past fortnight.

EasyJet, British Airways and Vueling owner IAG and Jet2 are also understood to be looking to hire staff and have been tipped as likely buyers for some of Monarch’s most popular slots to the sun from airports including Gatwick, Luton and Manchester.

EasyJet and IAG declined to comment on their intentions but a spokeswoman for the administrator, KPMG, said it was “hopeful that some of the best slots would be sold”.

However, one airline expert said that the simplest option might just be for slots to be returned to the pool, from which all airlines could bid for them.

Shares in rival airlines and tour operators rose as investors saw the potential to reduce the overcapacity in the market, which has been exacerbated by holidaymakers switching from terror-hit destinations to the Mediterranean. EasyJet was the biggest rise on the FTSE 100, up 4% to 1258p.

The collapse of Monarch, owned by Greybull Capital, is the third airline failure in Europe this year, following Alitalia and Air Berlin. Monarch has been hit hard by the pound’s post-Brexit referendum devaluation and terror attacks.

Neil Wilson at ETX Capital said it would take the heat off Ryanair. “There are now only really five big carriers operating in Europe: Ryanair, Lufthansa, International Airlines, Air France-KLM and easyJet. Many more mid-sized carriers are limping on but further consolidation may be necessary.”

Credit Suisse expects the UK’s biggest airline collapse to be “helpful” for the sector to improve margins but could leave customers paying more. The bank said holiday firms Tui and Thomas Cook could be among the winners and their shares rose.

A spokesman for Sir Stelios Haji-Ioannou, the veteran airline entrepreneur and major shareholder in easyJet, said prices are likely to rise. “Taking capacity out of the system will give operators greater freedom to set prices and increase shareholder value.”

Most rivals are hoping they will be able to pick up custom from the 300,000 passengers who have holidays booked with Monarch.

Around 410,000 have been affected in total.