Monarch Airlines

Patricia Gibson Excerpts

Monday 9th October 2017 Commons Chamber

[Chris Grayling]

There is no doubt that that was a significant factor, and not only because of changes in consumer patterns. Many other airlines chose to concentrate their resources this summer in the traditional resorts of Spain and Portugal. Alicante airport and others were full of planes this summer, and Monarch got squeezed out in a price war for which it was not financially strong enough. Ironically, it carried more passengers than two years ago, but with far lower revenues, and that more than anything else is what has caused its demise. It is a consequence of the security situation and of people taking a cautious approach to their holidays.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

The sad fate of Monarch Airlines is a stark example of the realities of Brexit beginning to bite. There is no denying that the fall in the pound has led to significant increases in the operating costs for the airline over the past year. The weak pound has also affected consumers and led to a drop in bookings. Add to that the uncertainties over the future of British carriers in Europe that served as a significant deterrent for any potential buyer who might otherwise have been found, and Monarch’s fate was sealed. Does the Secretary of State agree that as long as uncertainties over Brexit continue there is a danger of similar high-profile collapses?

Can the Secretary of State say with certainty today that the rights of UK passengers will not be eroded or diluted after Brexit? Will he confirm that the Government will work with administrators and the unions to ensure that employee rights are fully respected during the process, and that—where applicable—compensation is made available in a timely manner, in view of the fact that the manner of the administration raises real concerns about employee rights?

[Chris Grayling]

I am really sorry the hon. Lady has taken that approach. Let me be absolutely clear: this airline did not fail because of Brexit; this airline failed because it had a business model that was not capable of dealing with a price war in the Mediterranean. That is the reality of the situation and that is what its chief executive said. The hon. Lady talks about Brexit causing a lack of investment, but in the past few weeks we have seen a big expansion. Jet2 has set up a new base at Stansted and there has been a huge investment in the UK by Norwegian, which is becoming a real player in the low-cost marketplace. The market is changing and sadly Monarch, a business that has been around for 50 years, was not able to adapt to those changes. I am afraid she is just doing a disservice to the economy of the United Kingdom when she claims that this was a consequence of Brexit. She talks about employees. The biggest favour we can do for the employees of Monarch is to work to ensure they get another job quickly, and that is what we are seeking to do.