LONDON Monarch [MONA.UL], the British airline recently bailed out by its investment fund owner, expects broadly flat earnings for 2017, with pressure on fares offsetting growing demand for tickets.
Monarch, whose finances deteriorated this year after security concerns deterred travel to some destinations, is grappling with falling fares as rivals such as Ryanair (RYA.I) and easyJet (EZJ.L) put more seats onto the market to try to gain market share.
During 2016, Monarch warned the decline in demand for flights and holidays to Turkey, Tunisia and Egypt, and the devaluation of the pound after Britain's vote to leave the European Union, had made market conditions difficult.
It secured a 165 million pound ($205 million) lifeline from majority shareholder Greybull Capital in October, and said on Friday it expected earnings before interest, tax, depreciation and amortization (EBITDA) of 48 million pounds for the 12-months ended Oct. 31, 2016, down more than a third from the year before.
"I would expect it (profitability) to be a very similar range of 45 to 50 million pounds of EBITDA next year," Chief Executive Andrew Swaffield told reporters.
Bookings for next summer - when Monarch makes most of its profit - were more positive than this time last year, Swaffield added, with flight-only bookings up 10 percent and holiday bookings up 40 percent.
But the impact of a weaker pound over the whole 12 months - it has fallen 16 percent against the U.S. dollar and 9 percent against the euro since the June Brexit vote - plus falling ticket prices would offset the rise in passengers.
"Prices are very keen at the moment, there is a lot of competition out there so we are seeing volumes up, but great value for consumers in terms of prices," Swaffield said.
The currency moves hurt Monarch because while it makes over 80 percent of its revenues in pounds, its biggest costs such as fuel and leases are in dollars.
Luton, southern England-based Monarch sells holidays and flights to destinations such as Spain, Italy and France. The new capital it received in October is to help fund the replacement of its Airbus jets with more fuel-efficient Boeing 737 MAX-8 aircraft between 2018 and 2021.
(Reporting by Sarah Young; Editing by James Davey and Mark Potter)