Monarch airline warns profits will fall 35% this year

UK airline Monarch has warned that its profits will be down by 35% this year, describing the current trading environment as the "toughest ever".

Just months ago there were fears for its future, which were put to rest by a £165m investment boost from its majority shareholder, Greybull Capital.

Monarch said its full-year earnings were expected to fall from £74m to £48m in 2016.

But it added it was "well positioned to weather ongoing industry challenges".

The airline said new bookings for summer 2017 were up by 40% on the year before.

Chief executive Andrew Swaffield said: "The record investment in the business announced in October, enhanced marketing initiatives including our first TV advertising campaign in three years and continuing cost control means Monarch enters 2017 in a strong position."

The financing from Greybull in October allowed the airline to renew its membership of the Air Travel Organisers' Licensing (Atol) scheme - the scheme that refunds customers if a travel firm collapses.

It also meant the airline could invest in new aircraft.

Greybull Capital is Monarch's majority shareholder and is also known for its investment in Scunthorpe's steelworks.

It bought a majority stake in Monarch in 2014, with an investment of £125m.