Monarch Airlines a budget carrier based in Britain declared bankruptcy and stopped its operations, which left as many as 110,000 passengers stranded after the cancellation of flights of the airline.
On Monday, the airline entered bankruptcy in what is being called the biggest-ever collapse of an airline in the UK, after it struggled to maintain its operations during a difficult price war.
Analysts in London said that mounting pressures from costs and the increasingly competitive conditions of the short-haul market of Europe contribute to the airline experiencing losses on a regular basis.
The Monarch Aircraft Engineering business which is the group engineering arm did not enter bankruptcy and will continue operating normally with its shares still trading.
The Civil Aviation Authority (CAA) of the UK launched is program to help bring home the stranded travelers on new flights. The program covers those flying now and that are due to fly back prior to October 15, which authorities estimate to be more than 110,000 people.
The CEO of the CAA this was the largest ever airline in the UK to cease trading, so the UK government asked the CAA to help support the airline’s customers that are abroad to return to the UK when their vacations are over at no additional cost to the passengers.
However, those passengers who have not yet left on their scheduled trip were told not to report to the airport, as in all more than 300,000 future passenger bookings were cancelled.
Those who purchased tickets prior to December 14, 2016 are able to make their claim for compensation through the ATOL industry protection program for UK consumers, said authorities. People who purchased tickets after that date cannot file a claim.
The ongoing battle between low-cost airlines in Europe for passengers has pressured the prices of tickets lower, pushing some carriers into financial problems.
The second largest carrier in Germany Air Berlin filed for bankruptcy in August and Italy’s Alitalia has its assets under pressure after the flagship airline of Italy went insolvent.
During September, Ryanair had to cancel more than 18,000 flights after suspending 34 of its routes until March of 2018, placing the blame on vacation scheduling of its pilots.
Monarch was heading toward losing £60 million or $80 million in 2017 and over £100 million in 2018, said the CEO of the airline Andrew Swaffield.
Some of the airline’s costs increases following the drop in the sterling pound following the 2016 Brexit vote and the search for a buyer for the airline failed, said Swaffield.