Monarch announced this morning it has ceased trading, leaving 110,000 passengers stranded abroad.
Companies: On The Beach Group PLC
On the Beach (LON: OTB) has released a brief statement this morning, outlining the impact the news Monarch Airines has gone into administration might have on the Group.
Monarch ceased trading at 4am this morning, leaving up to 110,000 passengers stranded abroad and cancelling 300,00 future bookings. Until today, Monarch was the UK's fifth biggest airline and the country's largest to ever go into administration.
The CAA is currently organising more than 30 charter flights in what has been called the largest ever peacetime repatriation effort.
On the Beach, the cheap holiday package provider used Monarch as one of its flight partners,. On the Beach said today they are in contact with their customers who are currently abroad and were scheduled to fly with the airline back to the UK as part of their package, as well as those passenegers scheduled to fly in the coming weeks and months.
Management said the Group has Scheduled Airline Failure Insurance, which is in place to cover rare situations like today's. It covers all money paid to Monarch as well as the costs to repratriate customers currently on holiday.
However, the statement did also say the Board anticipates that there will be a "one-off exceptional cash cost" associated with helping customers to organise alternative travel arrangements, or providing refunds.
It seems the news has had little impact on OTB's share price this morning, with the stock trading slightly up from Friday's closing price. OK news so far for OTB shareholders, not so good news for Monarch passengers and its 2,100 staff.
On the Beach currently trades at a PE ratio on par with the industry median of 17x with a market cap of £515m.
