LONDON (Reuters) - Monarch does not have the right to sell its airport takeoff and landing slots, potentially the most valuable remaining part of the failed airline, a court in London ruled on Wednesday.
In a blow to administrators seeking to recoup money, the High Court rejected Monarch’s claim that it must be allocated slots for summer 2018 and said they will be placed into a pool.
“We are disappointed with today’s ruling and will be seeking leave to appeal as a matter of urgency,” Blair Nimmo, partner at KPMG and joint administrator of Monarch, said.
Administrators had sought a judicial review to establish if they had the right to sell airport slots, reportedly worth 60 million pounds.
But a judge dismissed the claim, saying that as Monarch was not flying and was unlikely to do so in the future, Airport Coordination Limited (ACL) had no duty to assign them slots.
“There is no more than a theoretical possibility of Monarch emerging as a going concern or resuming the operation of air services,” Judge Peter Gross told the court.
Gross said a decision on whether to grant an appeal would be adjourned until the full judgement was written.
British Airways owner 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.
The court’s ruling means that the slots will go into the pool and will be assigned by ACL. A slot allocation conference began on Wednesday in Madrid.
ACL said that slots at Manchester and Birmingham would immediately be returned to the pool, and allocated 50 percent to new entrants and 50 percent to incumbent operators.
The court ordered a stay of its decision on the highly sought after slots in Gatwick and Luton until Nov. 17, pending the administrators’ application for permission to appeal.
“As a result, the slots at Gatwick and Luton which were formerly operated by Monarch remain unallocated in the short-term,” ACL said in a statement.
Instead of reaping the proceeds of slot sales, Monarch was order to pay ACL’s costs.
Monarch investor Greybull Capital has agreed in principle that it should contribute to the cost of repatriating Monarch customers, should it emerge from the administration process in credit - a prospect less likely if administrators cannot sell or exchange airport slots.
The International Air Transport Association (IATA) welcomed the decision, saying slots should not be allocated to entities who only intended to sell them rather than operate flights.
“If the High Court had decided that Monarch had the right to sell slots it could not operate, it would have set a deeply concerning precedent for the aviation industry,” IATA said.
Reporting by Alistair Smout; editing by Stephen Addison/Keith Weir/Alexander Smith