There are a number of reasons for this – typically this sort of thing happens:

1. Monarch sells seats in bulk to Thomas Cook at a lower rate than the airline sells seats direct to the public. Monarch believes that they can sell the remaining premium seats directly for more money than they can get by selling/allocating more premium to Thomas Cook

2. Thomas Cook will have bought seats in bulk from Monarch – these seats become Thomas Cook’s to sell, and it is Thomas Cook’s risk if they do not sell all their allocation. If Monarch upgraded you, your standard seats would have to be released and sold again – in fact, Thomas Cook would have to sell them again (at their risk) as those seats are in Thomas Cook’s allocation. For this reason, operators like Thomas Cook do not want the airline to sell upgrades direct to Thomas Cook’s customers – it messes up Thomas Cook’s seat inventory sales. So the agreement between airline and tour operator is typically one where each does not usually interfere with the other’s sales

3. Monarch do not necessarily know what price Thomas Cook charged you for the standard seats (as within reason having bought seats in bulk from Monarch at a discount, Thomas Cook will be free to set their own pricing), so Monarch will be unable to work out what to charge you for the upgrade

The mistake you made was buying standard seats from Thomas Cook BEFORE you checked whether premium seats were available direct from Monarch. If you had done that first, you may have stood more change of arranging something, either by buying direct from Monarch or discussing your requirements with Thomas Cook before buying, explaining that you were aware that premium seats were still available direct, and basically refusing to buy from Thomas Cook unless they obtained premium seats for you. Now you’ve booked, the entire thing becomes too difficult!

Andy