Monarch administrators to appeal runway slot ruling

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Nov 09, 2017
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Monarch collapsed last month, leading to 1,858 redundancies

Steve Parsons/PA

Administrators for the failed airline Monarch are seeking an urgent appeal after losing a High Court battle over runway slots that they want to exchange with other carriers to raise cash for creditors.

On Wednesday two judges in London ruled against the airline, which went into administration on October 2.

Blair Nimmo, a partner at KPMG and joint administrator, said: “We are disappointed with today’s ruling and will be seeking leave to appeal as a matter of urgency.”

The collapse of Monarch, which was owned by the private equity firm Greybull Capital, led to 1,858 workers being made redundant and the flights and holidays of about 860,000 people being cancelled.

At the heart of the judicial review action was a decision by Airport Co-ordination Ltd (ACL), an industry body given the task of governing the allocation of slots, not to allocate certain take-off and landing slots to the airline for the summer 2018 season. Lord Justice Gross and Mr Justice Lewis were told by Monarch’s administrators that if received, those slots would represent its most valuable asset, which it would seek to exchange with other airlines “to realise value for its creditors”.

Lawyers argued that the approach taken by ACL was unlawful, saying that “ACL has no lawful power to refuse to allocate these slots or to ‘reserve’ them pending determination of proposals to revoke or suspend” the airline’s operating licence.

However, the judges rejected Monarch’s claim that ACL was under a duty to allocate the summer 2018 slots to it “by reason of historical precedence”.

Lord Justice Gross said: “Whatever flexibility and discretion ACL enjoys in other circumstances to reserve (or postpone) a decision, it is no longer entitled to reserve its decision on the summer 2018 slots on the facts of this case.

“That would be to sterilise or distort part of the market, to the potential detriment of third parties, for an uncertain period of time.”
The judge declared: “Accordingly, the consequence of our decision is that the summer 2018 slots are to be placed in the slot pool.”

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