MONARCH, the UK’s fifth-largest airline, folded in the early hours of Monday, nearly a year after receiving a £165m bail-out, and left around 110,000 overseas tourists in the lurch.

The company’s downfall is said to have been caused by the impact of terror attacks in key holiday markets, including Egypt and Turkey, the fall in the pound’s value following last year’s vote for Brexit, together with stiff competition in the low-cost carrier market.

But that’s no consolation for holiday-makers, because many of them will not be able to claim compensation. And some have already been threatened with immediate eviction from their hotels or apartments, and even arrest, unless they pay back the accommodation debts accrued by Monarch.

A source said that hotels were furious at being left out of pocket, and that some had not been paid for several months.

The CAA has phoned all 2,200 hotels used by Monarch to say it will cover any unpaid costs, via Atol, the Air Travel Organiser’s Licence scheme. But some owners still doubt they will receive their dues.

In the Balearic Islands alone, Monarch’s implosion has left hoteliers in Mallorca, Ibiza and Menorca facing debts which could run into millions.

It has emerged that, overall, up to 750,000 Monarch customers face a fight to get their money back.

The stricken airline’s administrator, KPMG, warned that just 10-15% of the company’s 860,000 customers were protected by Atol, which provides compensation to travellers when firms go bust. That number was far fewer than previously thought.

The remainder will either get nothing, or face a battle with their credit-card company, or travel insurers, to get their money back.

The airline’s dramatic collapse triggered the biggest-ever peacetime repatriation of passengers stranded abroad.

The problem is that the airline, in a desperate bid to cut costs, decided last December to stop offering Atol cover on flight-only bookings because it cost the company £2.50 per person.

It means that only those who booked a package deal are protected, although the Civil Aviation Authority (CAA), which runs the Atol scheme, admitted they might have to wait until Christmas to recover their money.

Those without Atol protection, who booked flights costing more than £100 using a credit card, can claim a refund under the Consumer Credit Act, although it will be a lengthy process.

Those who bought cheaper flights, or used a debit card, might have to rely on their travel insurance, if they have any. But many policies do not pay out if an airline goes bust.

One holiday couple in Los Cristianos were threatened with eviction last Tuesday unless they settled a bill of nearly £1,000, owed by Monarch for their accommodation.

After many years of travelling to the island with the company,  they were shocked to hear of Monarch’s impending collapse on Sunday.

They were told at the reception desk that they would have to settle the bill, or be asked to leave.

“We went into town to get away from the growing crowd of other angry holiday-makers, who had just received the same bombshell,” said the husband. “The manager wasn’t available, and, apparently, the letters were delivered 10 minutes before he went off duty.

“The CAA had assured us it would be paying hotels and other companies. But we never had any contact from Monarch, the company liquidators, company lawyers – or anyone picking up the pieces for Monarch.”

Roland De Gouveia, 41, from Reading, said he and his friends were told to pay £9,000 by a hotel owner in Lanzarote, or they would be locked out of their rooms.

Mike Heald, 36, from Manchester, with his family at another Lanzarote hotel, said Monarch had not even paid the owners the £3,300 he coughed up for the holiday months ago. He was told the police would be called if the family left without paying.

Surprisingly, Monarch launched a major sale of cheap flights last Friday, less than two days before its collapse. A member of the Commons Transport Committee called for an investigation into the “appalling behaviour” of both Monarch and Ryanair, which has cancelled thousands of flights.

Labour MP Graham Stringer said: “It appears that Monarch has come very close to trading when it had absolutely no chance of delivering the goods it was selling. It looks like Monarch has been highly-irresponsible. Package-holiday customers being hit with hotel bills will be very angry indeed.”

A CAA spokesman it has given “financial guarantees” to all hotels, and that any holiday-makers asked to pay again should do so, and then claim the money back from the CAA.

Andrew Haines, CAA Chief Executive, said: “This is the biggest UK airline ever to cease trading, so the Government has asked us to support Monarch customers currently abroad to get back to the UK at the end of their holiday at no extra cost.”

Customers abroad have been urged to contact the CAA (or visit, which is making alternative arrangements. But they should be able to finish their holiday.

They will return to Britain with an alternative airline, almost certainly at a new time, and may be forced to fly back to a different UK airport. But it will not cost them anything, assures the Authority.

The CAA added: “We will, of course, prioritise vulnerable passengers, including unaccompanied minors, and make sure that family groups travel on the same flights.”

Passengers’ new flights will be published at least 48 hours in advance of the original departure time. Details are published on the regulator’s “my new flight back to the UK” page.

From now on, passengers will use aircraft sourced by the CAA from other airlines, including Qatar Airways, easyJet and Air Transat. And rescue flights are underway. More than 30 aircraft will be chartered by the CAA.

So far, says Spain’s British Consulate, 34,608 Monarch customers are already back in the UK, on more than 173 flights.

Yesterday (Thursday), the CAA planned to bring home a further 6,885 passengers from Spain. And, in total, the CAA expects to bring back 10,793 passengers from across all Monarch destinations.

It’s flying programme continues until Sunday week (15th Oct).




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