On November 22, Monarch Airlines won an appeal against a court decision that deprived the carrier of its rights over valuable airport slots. This allows the debt administrators to raise money for paying Monarch’s debts by transferring the slots at London’s Gatwick and Luton airports to other airlines.
The Court of Appeal ruled that the Airport Coordination Limited, an independent body that deals with airport slots, should immediately allocate the Gatwick and Luton slots to Monarch as “Monarch remains an air carrier and is entitled to the slots it claimed”. However, the decision does not extend to Monarch’s Manchester and Birmingham assets. Under the judgment decision from November 8, 2017, these assets were exempted from any Court of Appeal ruling and are in the process of being reallocated through the general pool of slots, The Financial Times informs.
The decision reverses a previous High Court ruling
After Monarch went into administration in the beginning of October 2017, Airport Co-ordination Limited decided not to allocate certain take-off and landing slots to Monarch for summer 2018. ACL claimed that Monarch slots should be returned to the slot pool for re-distribution.
The lawyers of Monarch’s administrators then said that ACL “had no lawful power to refuse to allocate these slots or to “reserve” them pending determination of proposals to revoke or suspend MAL’s operating license,” BBC reported. However, on November 8, 2017, the High Court ruled against the administrators and supported the ACL’s decision “by reason of historical precedence.” Nevertheless, the High Court allowed Monarch to lodge an appeal over whether it could retain ownership of its summer 2018 Gatwick and Luton airport slots.
The sold assets will raise money for creditors
Monarch’s slots are estimated to be worth $79.61 million. Earlier, EasyJet, IAG, Wizz Air and Norwegian have expressed interest in acquiring them. The slots at Gatwick airport have generated the most interest because of a lack of capacity there at peak times. As Travel Weekly informs, if the slots raise enough money from the airlines, the private equity house Greybull as Monarch’s main creditor could end up making a profit on its administration. Criticism around the issue led Greybull to commit to sharing some of the proceeds to cover passenger repatriation costs.
In a letter to the chairman of the House of Commons transport select committee, Monarch’s owners indicated that profits recovered from the failed airline could be shared with the government, The Financial Times reports.
Monarch Airlines went into administration on October 2, 2017. Under British aviation law, Monarch’s Air Operator’s Certificate was suspended and its fleet grounded immediately upon its 4 AM bankruptcy filing, leaving 110,000 holidaymakers in need of repatriation, a further 300,000 bookings canceled and its 2,100 employees out of work.
Source – AeroTime