Monarch Airlines is in talks with aviation authorities to gain time as it seeks to pull together a multimillion-pound cash injection before its licence to fly expires at midnight on Friday.
Britain’s oldest surviving airline brand may seek a temporary extension to its annual operating licence from the Civil Aviation Authority if it can show it is close to arranging funding.
Monarch and many other airlines must renew their Air Travel Organiser’s Licence (Atol) by midnight on Friday. An Atol requires an operator to show it has enough money to operate for three months and provides compensation to customers when travel companies go bust.
The Luton-based carrier has been in talks with the CAA after doubts emerged about its financial strength. The speculation appears to have started when aircraft enthusiasts suggested planes were being lined up by the CAA to replace Monarch flights.
Monarch, which was founded in 1968, is 90% owned by Greybull Capital, a private investment firm that rescued it two years ago. On that occasion, the CAA gave Monarch a three-week extension so that it could sew up the deal with Greybull.
Monarch has said it is trading well but its “stakeholders” are discussing a significant investment to help it ride out difficult market conditions. The wording suggests Greybull will not provide all the money and will seek support, possibly from Monarch’s banks or other potential investors.
The Chinese conglomerate HNA Group, which owns Hainan Airlines, has expressed interest in Monarch, which has blamed industry difficulties on terrorist attacks, the Brexit vote and the fall in the pound.
Monarch employs about 2,800 staff who took pay cuts of up to 30% and accepted hundreds of redundancies when the rescue deal with Greybull was agreed. The Pension Protection Fund owns the other 10% of the airline.
Spokesmen for Monarch and the CAA declined to comment on the licence renewal. The Monarch spokesman said the airline was flying as normal.
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