Failed airline Monarch’s administrators win court appeal over runway slots

Administrators for failed airline Monarch have won their appeal over ’valuable’ runway slots.

The airline, which went into administration in October, wants to exchange the slots with other carriers to raise cash for creditors, but the High Court ruled against them earlier this month.

In the Court of Appeal in London today, three judges said: "Monarch remains an ’air carrier’ and is entitled to the slots it claimed."

The collapse of Monarch, which was owned by 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 by Monarch Airlines Ltd (MAL) was a decision by Airport Co-ordination Ltd (ACL) not to allocate certain take-off and landing slots to the airline for the summer 2018 season.

The High Court heard argument from 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".

A QC argued the approach taken by ACL was unlawful, submitting: "ACL has no lawful power to refuse to allocate these slots or to ’reserve’ them pending determination of proposals to revoke or suspend MAL’s operating licence."

But the judges rejected Monarch’s claim that ACL was under a duty to allocate the summer 2018 slots to Monarch "by reason of historical precedence".

The case concerned slots at Luton and Gatwick airports.

The Civil Aviation Authority (CAA) said this month that Monarch’s operating licence should be revoked on the basis that it did not need one as "there is simply no discernible prospect of it operating as an air carrier again".

That decision is to be appealed.

Giving the ruling of the Court of Appeal, Lord Justice Newey backed the argument of lawyers for Monarch who said that the High Court’s interpretation of "air carrier" was incorrect because it failed to accord with either the wording of the Slots Regulation or its purpose.

The judge said: "In short, it seems to us that, notwithstanding the views of the Divisional Court (of the High Court) to the contrary, Monarch was still an ’air carrier’ when slots fell to be allocated on October 26, 2017, and, in fact, remains one now."

The court granted Monarch a declaration that it is entitled to be allocated the relevant slots and that ACL may not lawfully delay their allocation, and an order requiring ACL immediately to allocate the slots in question to Monarch.


KEYWORDS: Monarch

 

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