Hundreds of job losses are expected following the collapse of Monarch Aircraft Engineering Limited (MAEL).

The former engineering arm of bankrupt holiday carrier Monarch Airlines had been put up for sale by its majority owner, private equity group Greybull Capital, in December.
However, no buyer could be found.

As a result, administrators from KPMG’s restructuring practice were called in earlier.

The majority of the company’s staff at Luton and Birmingham airports are being made redundant while other jobs within the 553-strong workforce have been saved.

Established in 1967 and headquartered at Luton Airport, the company provided aircraft maintenance services across four main divisions.

The company had completed a restructuring in October 2018, following which several customers sought alternative suppliers.

“This presented the business with significant challenges, making it unsustainable in its present form,” explained a statement from KPMG.

UK line maintenance operations at Gatwick, Birmingham, East Midlands, Newcastle and Glasgow Airports have largely transferred to Morson Group, with Luton Airport line maintenance operations transferring to Storm Aviation.

Certain Gatwick-based employees have also transferred to Boeing.

Further operations at Manchester and Birmingham Airports, including related employees, were transferred to Flybe following the cessation of their maintenance contract in late November 2018.

Collectively, these acquisitions ensure continuing employment for 182 employees.

However, 250 employees at Luton and Birmingham will be made redundant.

David Pike, restructuring partner at KPMG, said: “Following the administration of other Monarch entities in 2017, MAEL sought to build its customer base to replace the loss of business from the former airline.

“Through the insolvency of the airline however, the company inherited significant debts and claims.

“Every effort has been made to turnaround the business, including launching a CVA which sought to resolve these legacy debts.

“Unfortunately, following the CVA, a number of customers reduced or sought to terminate their relationship with MAEL, further adversely impacting the business.”

He added: “As a result, MAEL recently entered into talks with a number of potential parties with a view to selling all or parts of the business.

“While it is pleasing agreements with several operators have been secured to ensure continuity of service at the majority of MAEL’s line maintenance stations, with only partial offers forthcoming for the rest of the business, the directors have taken the difficult step to appoint administrators.”