Guide to airline insolvency—Monarch Airlines case study [Archived]

Copyright © 2025 LexisNexis
Produced in partnership with Mark Craggs of Norton Rose Fulbright
Practice notes

Guide to airline insolvency—Monarch Airlines case study [Archived]

Copyright © 2025 LexisNexis

Produced in partnership with Mark Craggs of Norton Rose Fulbright

Practice notes
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ARCHIVED: This archived Practice Note looks at the Administration of Monarch Airlines which took place in 2017. It is not maintained and is for background information only.

This Practice Note forms part of a set of Practice Notes on airline Insolvency. For further information, see Practice Notes:

  1. •

    Guide to airline insolvency—introduction

  2. •

    Guide to airline insolvency—insolvency proceedings, Receivership, restructuring plans and Schemes of arrangement

  3. •

    Guide to airline insolvency—international considerations

Background and lead-up to administration

Prior to its entry into administration on 2 October 2017, Monarch Airlines was an airline operating scheduled flights to tour operators, travel agents and directly to consumers to and from five UK airports (Birmingham, Leeds-Bradford, Gatwick, Luton and Manchester), to and from 44 destinations, most of which were in the Mediterranean and the Canary Islands. Along with many airlines worldwide, it had encountered difficult market conditions and, in 2014, it underwent an extensive restructuring process. In 2015, the group returned to profitability. However, continued challenging conditions in the European aviation market (including terrorist

Mark Craggs
Mark Craggs

Norton Rose Fulbright

Mark Craggs is a restructuring and insolvency lawyer based in the London office of Norton Rose Fulbright. He advises UK and international insolvency office-holders, banks and other creditors, corporates, directors, pension scheme trustees, government bodies, regulators and other stakeholders on a wide range of contentious and non-contentious matters. Mark is a Fellow of INSOL International and a member of a number of committees of INSOL International (including the Technical Research Committee and the Younger Members Committee). He is also a member of the International Insolvency Institute's NextGen Leadership Program, the Insolvency Lawyers' Association and the Association of Business Recovery Professionals (R3). In 2016, he was selected as one of the "40 Under 40" cross-border restructuring and insolvency lawyers worldwide by Global Restructuring Review. He is described in Legal 500 (2017) as an "excellent all-round insolvency lawyer".

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Jurisdiction(s):
United Kingdom
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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