The collapse of Monarch Airlines was a disaster for passengers. But it was a victory for regulation

Sorry kids, holiday's cancelled. Image: Getty.

With the UK forced to conduct the biggest peacetime repatriation in history, of 110,000 customers following the collapse of Monarch Airlines – the biggest UK airline ever to cease trading – questions are quite rightly being asked about what went wrong.

Intense competition, terrorism, and Brexit-related sterling changes have already surfaced as the main culprits. But after the anger and recriminations have calmed down, attention should turn to the correct behaviour of the agency charged with protecting consumer rights. In this case the Civil Aviation Authority.

The CAA’s job is to ensure that “consumers have choice, value for money, are protected and treated fairly when they fly”. To this end, it has made 22 prosecutions against various operators under its Regulatory Enforcement Policy over the past six years.

It now falls to the CAA to charter flights to bring Monarch’s customers home and manage the 300,000 future bookings, which the airline sold before going into administration. Within 48 hours, more than 23,000 Monarch customers had been flown home to the UK on 119 flights.

Turbulent times

Monarch regularly required injections of cash, but its most recent troubles started in 2014 with losses of £210m. This triggered a major restructuring which included new owners and new management. A shift was also made from offering more high-end long-haul charter flights that formed part of package holidays to scheduled low-cost flights. And fleet renewal was a core component of the transformation too – a shift to more fuel-efficient planes that could reduce the cost per seat.

Image: Centre for Aviation.

The results of this restructuring were impressive. The company recorded its best results in 2015 for more than ten years – a pre-tax profit of £26m, compared to a loss of £210m in 2014.

Events outside of the airline’s control, however, quickly put the company back into the red. Brexit-induced currency fluctuations were costly. As Monarch’s chief executive, Andrew Swaffield, put it: “We take nearly all of our revenue in pounds and a lot of our costs go out in dollars and euros... so we get no revenue benefit from a decline in the pound but we get a big cost increase.”

Terrorist attacks in Egypt and Turkey also heightened competition between Monarch and its competitors to the more traditional destinations of Spain and Portugal. This led to more intense price competition. Monarch lost out because it was more dependent on the UK market and its aircraft were less fuel efficient.

By the end of summer 2016, rumours abounded about poor financial health. Monarch insisted things were fine but the CAA was so concerned that it spent £25m setting up a shadow airline in case Monarch folded. Planes were chartered and sent to Mediterranean airports to mimic Monarch’s schedule. Ultimately, they were not needed as Monarch’s majority owner came up with the £165m necessary to keep it afloat. But it was a precursor of things to come and demonstrated the CAA’s awareness and ability to take action.

The increased competition in the European airline industry this year has been felt by all the low-cost carriers. But the heavy losses reported in August by the Monarch Group reflected its relatively higher unit costs.


Putting consumers first

Despite calls from its unions for financial help from the UK government, no investors were forthcoming. Monarch failed to meet the financial standards required to renew its Air Travel Organisers’ Licence (Atol), despite being granted a 24-hour extension by the CAA from midnight on Saturday 30 September until midnight on Sunday 1 October. KPMG were then called in as liquidators at 4am on 2 October (when no aircraft were in the air).

By demonstrating that it was not prepared to accept poor compliance, the CAA explicitly signalled to other airlines that consumers’ rights came first. Had Monarch been allowed to continue trading, there was a very high likelihood that more of the 300,000 booked passengers would have become embroiled in the collapse, customers would continue to buy flights and holidays that had little prospect of happening, and suppliers would continue to provide services that may never be paid for. Kicking the can down the road would have led to far more customers losing out and potentially more job losses.

This was the second time in a few days that the CAA stepped in to protect the consumer. On 29 September, it ordered Ryanair to tell passengers that had been disrupted by cancelled flights how it would provide them with alternatives. By contrast, the Irish regulator was criticised for not taking the same kind of enforcement action against Ryanair.

With light-touch regulation blamed by many for the banking crisis of 2008, the UK government reviewed and executed a Better Regulation Framework aimed at both increasing consumer protection and reducing the burden imposed on industry. This applied to aviation, as well as banking.

The ConversationWhile the customers hit by the demise of Monarch Airlines may well feel aggrieved at the disruption to their plans, if the CAA did not adhere as strictly to its mandate, many more of the 142m passengers carried by UK airlines might go on to suffer.

Padraic Regan is a researcher in aviation at Trinity College Dublin.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

12 things we learned by reading every single National Rail timetable

Some departure boards, yesterday. Image: flickr.com/photos/joshtechfission/ CC-BY-SA

A couple of weeks ago, someone on Twitter asked CityMetric’s editor about the longest possible UK train journey where the stations are all in progressive alphabetical order. Various people made suggestions, but I was intrigued as to what that definitive answer was. Helpfully, National Rail provides a 3,717 page document containing every single timetable in the country, so I got reading!

(Well, actually I let my computer read the raw data in a file provided by ATOC, the Association of Train Operating Companies. Apparently this ‘requires a good level of computer skills’, so I guess I can put that on my CV now.)

Here’s what I learned:

1) The record for stops in progressive alphabetical order within a single journey is: 10

The winner is the weekday 7.42am Arriva Trains Wales service from Bridgend to Aberdare, which stops at the following stations in sequence:

  • Barry, Barry Docks, Cadoxton, Cardiff Central, Cardiff Queen Street, Cathays, Llandaf, Radyr, Taffs Well, Trefforest

The second longest sequence possible – 8 – overlaps with this. It’s the 22:46pm from Cardiff Central to Treherbert, although at present it’s only scheduled to run from 9-12 April, so you’d better book now to avoid the rush. 

  • Cardiff Central, Cardiff Queen Street, Cathays, Llandaf, Radyr, Taffs Well, Trefforest, Trehafod

Not quite sure what you’ll actually be able to do when you get to Trehafod at half eleven. Maybe the Welsh Mining Experience at Rhondda Heritage Park could arrange a special late night event to celebrate.

Just one of the things that you probably won't be able to see in Trehafod. Image: Wikimedia/FruitMonkey.

There are 15 possible runs of 7 stations. They include:

  • Berwick Upon Tweed, Dunbar, Edinburgh, Haymarket, Inverkeithing, Kirkcaldy, Leuchars
  • Bidston, Birkenhead North, Birkenhead Park, Conway Park, Hamilton Square, James Street, Moorfields
  • Bedford, Flitwick, Harlington, Leagrave, Luton, St Albans City, St Pancras International

There is a chance for a bit of CONTROVERSY with the last one, as you could argue that the final station is actually called London St Pancras. But St Pancras International the ATOC data calls it, so if you disagree you should ring them up and shout very loudly about it, I bet they love it when stuff like that happens.

Alphabetical train journeys not exciting enough for you?

2) The longest sequence of stations with alliterative names: 5

There are two ways to do this:

  • Ladywell, Lewisham, London Bridge, London Waterloo (East), London Charing Cross – a sequence which is the end/beginning of a couple of routes in South East London.
  • Mills Hill, Moston, Manchester Victoria, Manchester Oxford Road, Manchester Piccadilly – from the middle of the Leeds-Manchester Airport route.

There are 20 ways to get a sequence of 4, and 117 for a sequence of 3, but there are no train stations in the UK beginning with Z so shut up you at the back there.

3) The longest sequence of stations with names of increasing length: 7

Two of these:

  • York, Leeds, Batley, Dewsbury, Huddersfield, Manchester Victoria, Manchester Oxford Road
  • Lewes, Glynde, Berwick, Polegate, Eastbourne, Hampden Park, Pevensey & Westham

4) The greatest number of stations you can stop at without changing trains: 50

On a veeeeery slow service that calls at every stop between Crewe and Cardiff Central over the course of 6hr20. Faster, albeit less comprehensive, trains are available.

But if you’re looking for a really long journey, that’s got nothing on:

5) The longest journey you can take on a single National Rail service: 13 hours and 58 minutes.

A sleeper service that leaves Inverness at 7.17pm, and arrives at London Euston at 9.15am the next morning. Curiously, the ATOC data appears to claim that it stops at Wembley European Freight Operations Centre, though sadly the National Rail website makes no mention of this once in a lifetime opportunity.

6) The shortest journey you can take on a National Rail service without getting off en route: 2 minutes.

Starting at Wrexham Central, and taking you all the way to Wrexham General, this service is in place for a few days in the last week of March.

7) The shortest complete journey as the crow flies: 0 miles

Because the origin station is the same as the terminating station, i.e. the journey is on a loop.

8) The longest unbroken journey as the crow flies: 505 miles

Taking you all the way from Aberdeen to Penzance – although opportunities to make it have become rarer. The only direct service in the current timetable departs at 8.20am on Saturday 24 March. It stops at 46 stations and takes 13 hours 20 minutes. Thankfully, a trolley service is available.

9) The shortest station names on the network have just 3 letters

Ash, Ayr, Ely, Lee, Lye, Ore, Par, Rye, Wem, and Wye.

There’s also I.B.M., serving an industrial site formerly owned by the tech firm, but the ATOC data includes those full stops so it's not quite as short. Compute that, Deep Blue, you chess twat.

10) The longest station name has 33 letters excluding spaces

Okay, I cheated on this and Googled it – the ATOC data only has space for 26 characters. But for completeness’ sake: it’s Rhoose Cardiff International Airport, with 33 letters.

No, I’m not counting that other, more infamous Welsh one, because it’s listed in the database as Llanfairpwll, which is what it is actually called.

 

This sign is a lie. Image: Cyberinsekt.

11) The highest platform number on the National Rail network is 22

Well, the highest platform number at which anything is currently scheduled to stop at, at least.

12) if yoU gAze lOng into an abYss the abySs alSo gazEs into yOu

Image: author's own.

“For I have seen God face to face, and my life is preserved”, said Thomas.

Ed Jefferson works for the internet and tweets as @edjeff.

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