British airline Monarch has said it expects to return to profit this year following a multi-million pound rescue package by Greybull Capital family office, which purchased the firm in October.
The Luton-based airline was reportedly on the brink of collapse before Greybull Capital, headed by the Meyohas brothers, injected £125 million (€166 million) in October in exchange for a 90% stake.
The 47-year-old airline, founded by the Mantegazza family in the 1960s, has since cut staff numbers and pay and is reducing its fleet from 42 to 34 aircraft. The restructure will cut annual costs by £200 million.
Monarch, which hopes to emulate the successes of Ryanair and easyJet, is expecting losses of £169 million in 2014, but projects that it will return to the black in 2015 with profits between £10 million and £100 million.
"It's clearly going to be a substantial turnaround from the loss-making 2014," chief financial officer Barry Nightingale told Reuters. "But we are not yet able to predict whether it is going to be a low or high double-digit."
Budget airlines are currently benefitting from lower oil prices, which have fallen by more than 50% in six months. Some industry analysts have suggested that the price drop has merely prolonged the lifespan of some budget airlines that are doomed to fail.
Chief executive of Monarch Airlines Andrew Swaffield discussed the restructure: “We are delivering a proper restructuring and turnaround of Monarch as we said we would. There is much to be done, but we now have a business with much lower costs, a solid platform for developing sustainable profitability and a clear strategic focus.”
Monarch Airlines had been a profitable business until the late 90s until travellers started opting for budget airlines. The Mantegazza family injected £75 million into the business in 2011, and two years before that £45 million.
As part of its plans Monarch will receive 30 Boeing 737 MAX 8 jetliners from 2019 as it phases out its existing fleet.