Taxpayers left with £60m bill from the 2017 collapse of budget airline Monarch
Taxpayers will be forced to foot the entire £60million bill for getting passengers home when they were stranded following the collapse of Monarch in 2017.
More than 110,000 passengers were trapped abroad when the budget airline went into administration at 4am on October 2, 2017.
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At the time it was the largest ever failure of a UK airline and was also the biggest operation during peacetime to bring Britons home from overseas.
Grounded: More than 110,000 passengers were trapped abroad when budget airline Monarch went into administration at 4am on 2 October 2017
Monarch’s owner Greybull Capital had promised to give the Government any profits it received from the administration process to help pay for the airlift.
It was hoped a small amount could be recouped for the Department for Transport (DfT) at a time when the pandemic has wrecked the state’s finances.
But papers released by auditor KPMG show Greybull lost £25million from the administration process, which was completed last month.
As a result the controversial turnaround group will not contribute anything at all to the eye-watering bill, which cost around £550 per passenger.
Marc Meyohas, Greybull’s boss and co-founder, had said in a leaked letter to Parliament’s transport committee that it had a ‘moral obligation’ to hand back cash if it made a profit.
The Civil Aviation Authority was forced to charter 34 planes from the likes of Easyjet and Qatar Airways days after Monarch went bust.
Two years later the Government had to step in to take home 150,000 British holidaymakers when Thomas Cook imploded after 178 years in business.
Greybull – which has also presided over failures at Comet, British Steel and M Local – bought Monarch in 2014.
The Luton-based carrier, founded in 1967, had been struggling for years to keep up with the rapid rise of budget airlines that offered cut-price tickets.
Fortunes worsened when a string of terrorist attacks, including in Tunisia in 2015, hit bookings and a fall in the value of the pound following the Brexit vote raised costs.
It managed to stave off collapse in 2016 with a cash injection, but the company failed a year later when the Civil Aviation Authority chose not to renew its Air Travel Organiser’s Licence (Atol).
When Monarch collapsed Greybull was owed £95million but the firm only managed to regain £70million – leaving it £25million out of pocket.
More than £250million was invested in Monarch from Greybull and other sources between 2014 and 2017.
The DfT said: ‘As you would expect, maximising the amount of money recovered for taxpayers is a priority.
‘However, we will only consider our next steps once we have assessed the outcomes of the Monarch administration report.’
Greybull Capital declined to comment.