Profits at Monarch Airlines have fallen by a third after a turbulent year, blighted by the effects of terrorism and the drop in the pound.
The carrier, which received its fifth financial bailout in four years in September, said that earnings for the year to October were expected to be about £48 million, down from £74 million.
The airline said that uncertainty over the renewal of its Atol licence — ended by the £165 million investment from Greybull Capital — had a short-term impact on profits, but it was hurt by the closure of Sharm el Sheikh, which accounted for 10 per cent of revenue.
A 65 per cent fall in demand in Turkey also hit profits and the slump in the value of sterling had cost Monarch dear. The company makes most its revenue in pounds but pays for fuel and aircraft costs in dollars and for navigation and ground handling in euros.
Despite the profit warning the company was upbeat yesterday, reporting a 40 per cent increase on holiday booking for summer next year and a rise of 10 per cent in flight-only sales.
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The airline also expects to make big savings from 2018 when it receives the first of a new fleet of 30 Boeing 737 Max 8s which will cut its £130 million annual fuel bill by about a quarter and maintenance costs by 80 per cent.
It also hopes that the launch of new city routes will boost revenue and it expects a strong performance from destinations such as Barcelona and Venice, which saw double-digit growth this year.
Andrew Swaffield, chief executive, said that the reduced profits were a “good result in a challenging year” which was “arguably the toughest trading environment faced by the industry”.
He said: “It’s probably the worst year in my 30 year career and we are pleased to be profitable in that year.”