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By Sarah Young
LONDON, Dec 16 (Reuters) - Monarch, the Britishairline recently bailed out by its investment fund owner,expects broadly flat earnings for 2017, with pressure on faresoffsetting growing demand for tickets.
Monarch, whose finances deteriorated this year aftersecurity concerns deterred travel to some destinations, isgrappling with falling fares as rivals such as Ryanair and easyJet put more seats onto the market to try togain market share.
During 2016, Monarch warned the decline in demand forflights and holidays to Turkey, Tunisia and Egypt, and thedevaluation of the pound after Britain's vote to leave theEuropean Union, had made market conditions difficult.
It secured a 165 million pound ($205 million) lifeline frommajority shareholder Greybull Capital in October, and said onFriday it expected earnings before interest, tax, depreciationand amortisation (EBITDA) of 48 million pounds for the 12-monthsended Oct. 31, 2016, down more than a third from the yearbefore.
"I would expect it (profitability) to be a very similarrange of 45 to 50 million pounds of EBITDA next year," ChiefExecutive Andrew Swaffield told reporters.
Bookings for next summer - when Monarch makes most of itsprofit - were more positive than this time last year, Swaffieldadded, with flight-only bookings up 10 percent and holidaybookings 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 percentagainst the euro since the June Brexit vote - plus fallingticket prices would offset the rise in passengers.
"Prices are very keen at the moment, there is a lot ofcompetition out there so we are seeing volumes up, but greatvalue for consumers in terms of prices," Swaffield said.
The currency moves hurt Monarch because while it makes over80 percent of its revenues in pounds, its biggest costs such asfuel and leases are in dollars.
Luton, southern England-based Monarch sells holidays andflights to destinations such as Spain, Italy and France. The newcapital it received in October is to help fund the replacementof its Airbus jets with more fuel-efficient Boeing 737 MAX-8aircraft between 2018 and 2021.
($1 = 0.8041 pounds) (Reporting by Sarah Young; Editing by James Davey and MarkPotter)
