Monarch administrators launch legal battle over airport take-off slots
The administrators of Monarch Airlines are seeking a judicial review to allow them to sell its take-off and landing slots (Robert Lea writes).
Almost four weeks after Monarch was put into bankruptcy protection, insolvency partners at KPMG, one of the “big four” accountancy practices, have made an urgent application to the High Court over whether they have the right to sell the 18 slots at Gatwick Airport.
They could be worth as much as £60 million at auction, because it is so rare for the spaces to become available.
If the administrators persuade a judge that they can sell the slots, it is likely that the proceeds will go to Monarch’s former owner, the private equity firm Greybull Capital, which is the carrier’s main secured creditor.
The question over the ownership of the slots has come to a head because yesterday was the deadline for Airport Co-ordination, the industry self-regulatory body that oversees the allocation of airport slots, to make sure that t ake-off and landing rights are in place for next year’s summer season.
The body is believed to have challenged the KPMG partners over whether they, as mere administrators of an airline, have the same rights to the slots.
The administrators contend that they hold the rights to the slots for as long as they continue to hold an operating licence. Monarch’s licence is held by KPMG but is subject to a revocation process with the industry regulator, which is likely to run well into next month.
KPMG confirmed that it had instructed Freshfields Bruckhaus Deringer, the City of London “magic circle” law firm, to seek leave for judicial review. A ruling on the issue could be made within the week.