Outrigger Hotels and Resorts

Published on Wednesday, October 14, 2015

Monarch boss predicts demise of the charter airline model

Monarch Airlines CEO Andrew Swaffield has predicted the end of the charter airline model as it currently stands.

Speaking at this year's ABTA Travel Convention, he said the charter model will be confined to the likes of vertically-integrated giants like Thomas Cook and TUI Group, or to specialist operators like Titan.

But he believes outside of this tour operators need to turn to the likes of low-cost scheduled airlines for flight capacity.

"The charter model is effectively disappearing as an option to independent tour operators," he said.

"My view is that tour operators and other intermediaries need to learn how to work with low-cost scheduled carriers. There's a cultural gap that needs to be bridged but I believe both sides are now reaching out."

He said Monarch has a history of working with tour operators and now there are early signs of airlines like easyJet doing the same.

"I would encourage you (tour operators) to meet with them and educate them about your needs and also to try to understand their business models.

"It's all about how to make it work with technology, the financial arrangements and the willingness for everyone to try to understand each other's needs. There needs to be a strong spirit of co-operation."

Outlining his predictions for the European aviation space, Swaffield said he believes there are too many airlines in Europe - 86 today - and that around half are challenged by a high cost base.

"My prediction is that there will significant consolidation and a growing divide between those which have restructured their cost base and those which haven't," he said.

"It's not a question of size, but whether or not they have a clear brand, customer segment and whether they have lowered their cost base to a suitable level."

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