A London court has ruled that embattled British carrier Monarch Airlines has no right to sell its airport takeoff and landing slots, which are considered to be the most valuable remaining assets of the failed airline.
The decision by the High Court to rebuff Monarch’s claim that it must be allocated slots for summer 2018, was a massive blow to administrators that were seeking to get back money. Instead, the slots would be placed in a pool.
“We are disappointed with today’s ruling and will be seeking leave to appeal as a matter of urgency,” said Blair Nimmo, a Partner at KPMG and Joint Administrator of Monarch.
Administrators had been looking for a judicial review to determine if they had the right to sell airport slots, reportedly worth 60 million pounds ($79 million).
But a judge dismissed the claim, declaring that as Monarch was not operating and was unlikely to do so in the future, Airport Coordination Limited (ACL) had no obligation to assign them slots.
“There is no more than a theoretical possibility of Monarch emerging as a going concern or resuming the operation of air services,” Judge Peter Gross announced.
Gross said a decision on whether to allow an appeal would be deferred until the full judgment was written.
British Airways owner IAG, easyJet, Norwegian and Wizz Air have all conveyed interest in obtaining Monarch’s slots, specifically at London’s Gatwick and Luton airports.
The court’s decision means that the slots would go into the pool and will be allocated by ACL. A slot allocation conference recently began in Madrid.
ACL said that slots at Manchester and Birmingham would directly be returned to the pool, and allocated 50% to new entrants and the other half to incumbent operators.
The court ruled a stay of its decision on the highly sought after slots in Gatwick and Luton until November 17, as it awaits the administrators’ application for permission to appeal.
“As a result, the slots at Gatwick and Luton which were formerly operated by Monarch remain unallocated in the short-term,” ACL announced in a statement.
Instead of procuring the proceeds of slot sales, Monarch was instead mandated to pay ACL’s costs.
Monarch investor Greybull Capital has settled in principle that it should subsidize to the cost of repatriating Monarch customers, should it arise from the administration process in credit – a development less likely if administrators cannot sell or exchange airport slots.
The International Air Transport Association (IATA) lauded the decision, saying slots should not be given to entities who only want to sell them rather than operate flights.
“If the High Court had decided that Monarch had the right to sell slots it could not operate, it would have set a deeply concerning precedent for the aviation industry,” IATA said.