Monarch Airlines

Debate between Lord Callanan and Lord McKenzie of Luton

Monday 9th October 2017 Lords Chamber

[Lord Callanan]

I am afraid I am not familiar with that case, but Ryanair will have to comply with the rules and regulations in the same way as everyone else, as I said in my previous answer. With regard to passengers who are leaving this country, I am afraid that in this case our responsibilities extend to getting those who are stranded abroad repatriated. People who have booked flights in advance with Monarch will need to look at their travel insurance or their credit or debit card companies to gain a refund. However, I am sure the noble Viscount will understand that it cannot be the Government’s responsibility to fly people out from this country. We took the view that our responsibility was to repatriate those who were stranded abroad at no cost to themselves. As I have said, we are working with credit and debit card companies to try to recover as much of that money as possible, but there is a limit to how much we can intervene in these matters.

[Lord McKenzie of Luton (Lab)]

My Lords, I start by declaring my interest as an advisory member of the board of London Luton Airport. These are difficult days locally, as the Minister has said. Monarch has been a proud Luton-based carrier for nearly 50 years and a good employer. It is one of two airlines that for many years helped to sustain the airport itself, together with Britannia Airways. If there is a silver lining, as has been explained, it is the vibrancy of the aviation sector, and London Luton Airport in particular, which is the fastest growing airport in the UK and the country’s fifth-biggest airport.

I welcome the action that the Government have taken and recognise that substantial costs have hit the public purse in the form of repatriation costs, redundancy payments and the pension scheme, involving the PPF. Is it right that when Greybull Capital purchased Monarch Airlines, it was on the basis that the PPF should take responsibility for a £600 million pension scheme obligation in return for a derisory stake in the business? Can the Minister also say something about Monarch Aircraft Engineering? He has said that it is not affected by this, which is good news so far because plenty of skills and skilled jobs are deployed in that company. However, can he say where this will leave the ownership of that entity?

[Lord Callanan]

The noble Lord has given me an opportunity to pay tribute to the five UK airports involved, considering that they were informed only a matter of hours before the administration took place. All five airports, including Luton, did an absolutely fantastic job in helping us by laying on staff to inform people who, sadly, were arriving on the Monday morning expecting to go away on holiday that the airline had gone into administration. Credit is due to all the airports. I am not aware of the precise circumstances of the bailout a year ago, but I understand that the information the noble Lord has is correct. The PPF took responsibility for the pension fund as part of that deal. I was not in post at the time and I do not know all the details, and it would be remiss of me to comment too much on them, but I will write to him.

[Lord McKenzie of Luton]

Could the Minister please deal with the point about Monarch Aircraft Engineering?

[Lord Callanan]

As I understand it, the engineering business is still trading normally and is not in administration. Clearly, a substantial part of its work was with Monarch, but the majority of it is with other airlines. As I say, I believe it is trading normally but if I have any updated information, I will be sure to let the noble Lord know.