November 9, 2017 / 6:23 PM / in a year

British aviation authority revokes Monarch's operating licence

LONDON (Reuters) - Britain’s aviation authority on Thursday revoked the operating licence of Monarch [MONA.UL] following its sudden collapse in early October.

FILE PHOTO: Monarch airplanes are seen parked on the runway at Newquay airport, Newquay, Britain, October 26, 2017, REUTERS/Toby Melville/File Photo

Monarch had argued to the Civil Aviation Authority (CAA) that it should retain its operating licence, as Air Berlin did when it entered administration earlier this year. It also said that a suspension rather than a revocation of the licence could help to achieve a better outcome for creditors.

However, the CAA ruled that as Monarch no longer had the aircraft at their disposal or the ability to operate flights, it was in a different situation from Air Berlin, and that the issues that led to Monarch’s failure would not go away.

“It might be appropriate to suspend a licence rather than revoke it where there is a prospect of the carrier remedying the problem,” the CAA said in its decision.

But it added: “All the evidence suggests that there is no such prospect.”

Over 100,000 holidaymakers needed repatriating after Monarch’s sudden collapse, and administrators at KPMG are trying to recover value from the company.

This week a court ruled that Monarch had no right to be allocated airport slots for next year, which were valued at around 60 million pounds ($80 million) and were potentially the most valuable remaining part of the business.

While the implementation of that decision at London’s Gatwick and Luton airports has been paused pending a decision over permission to hold an appeal, the CAA’s decision to revoke the operating licence could further damage any remaining hopes Monarch had of hanging on to its slots.

Alex Cruz, chief executive of IAG’s British Airways, said during a trip to Israel on Thursday that he hoped the ambiguity over the slots could be sorted out quickly, as airlines would need to allocate planes to the slots and customers would need to start booking flights.

IAG (ICAG.L), easyJet (EZJ.L), Norwegian (NWC.OL) and Wizz Air (WIZZ.L) have all expressed interest in acquiring Monarch’s slots, especially at London’s Gatwick and Luton airports.

Cruz said that British Airways, along with other IAG (ICAG.L) owned airlines, was interested in the Gatwick slots.

“We are in limbo here ... This cannot go on forever - and the summer is coming,” he told Reuters. “I sincerely hope we can reach a decision over the next two, three, four weeks.”

Reporting by Alistair Smout; additional reporting by Steven Scheer in Tel-Aviv; editing by Stephen Addison

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