The owner of Monarch made desperate calls to rivals in a bid to sell the struggling business in the days before it collapsed.
EasyJet, British Airways and Norwegian were approached by owner Greybull and accountants KPMG last week and offered the chance to take control of the failing airline.
Budget rival Wizz Air, which specialises in routes to eastern Europe, was also approached.
The airlines were given the chance to snap up short-haul routes – and, crucially, Monarch’s valuable runway slots – as management frantically tried to raise cash to boost the balance sheet.
Braced for impact: The owner of Monarch made desperate calls to its rivals to offload its struggling short-haul business in the days before the business collapsed
However, when talks failed the firm was left with no cash and it sank into administration yesterday morning.
Shares across the UK’s largest airlines climbed when the news broke, on the expectation they would benefit from a boost in passenger numbers. EasyJet shares jumped 5.2 per cent, Ryanair rose 3.9 per cent and British Airways owner IAG increased 2.4 per cent.
There is now expected to be a bidding war for some parts of Monarch’s business, particularly its coveted slots at Manchester and Gatwick airports.
An analysis of Monarch’s recent accounts warned of a number of factors that affected its income and ultimately led to its demise.
These included the knock-on effects of terrorist attacks in Tunisia and Egypt, which saw holiday firms boycott the regions, and higher currency exchange costs because of the weak pound.
Between 2015 and 2016 its revenues dropped by £100million to £558million. Monarch’s capacity fell, and the total number of booked passengers dropped by 7 per cent. It also flew more aircraft with empty seats.
In October 2016 it was forced to write-down £102.8million over aircraft leases, and a further £198million for unavoidable costs on leases.
Last week Greybull and KPMG are believed to have held discussions with EasyJet, Wizz Air, Norwegian and British Airways in a last-ditch move to force a sale of its embattled short-haul business.
Ryanair, which runs a Boeing-only fleet, is believed to be out of the running as Monarch used Airbus planes.
Robin Byde, transport analyst at Cantor Fitzgerald, said: ‘Monarch assets may enable EasyJet to increase frequencies on common routes, gain more attractive year-round and seasonal slots, and generally take market share.
‘On fleets, synergies could be attractive as Monarch currently operates 34 Airbus A320 family aircraft which are compatible with EasyJet’s fleet.’
Monarch is the biggest UK airline to cease trading and around 860,000 customers are believed to be affected by the collapse – including 110,000 who have been stranded abroad.
Wizz Air yesterday announced £119 ‘rescue fares’ for Monarch passengers stranded in Tel Aviv.
Monarch’s collapse follows the demise of European airlines Alitalia and Air Berlin, which fell into administration earlier this year.
Alitalia filed to be put under special administration in April – for the second time in less than a decade – after workers rejected wage cuts linked to a £1.7billion rescue plan.
Air Berlin, which opted against a government bailout in favour of winding down is business, has received bids from Lufthansa, EasyJet and Condor.