The administrator of Monarch Airlines (1968) (London Luton) has announced it is to seek judicial guidance over its proposed sale of the bankrupt leisure operator's airport slots.
Monarch owns slots at several of the UK's largest gateways including London Luton, Birmingham, GB, Leeds/Bradford, Manchester International, and London Gatwick. The twenty it has at Gatwick alone have been valued at GBP60 million (USD79 million).
"Given the complexity of the slot exchange process, we are seeking a judicial review on this particular matter," Joint administrator and KPMG partner Blair Nimmo said in a statement last week. "In addition to assisting the joint administrators to fulfill their statutory duties, we believe this to be in the wider public interest, with the intention of resolving this matter quickly and with the greatest chance of maximising the continued use of the slots."
Questions have been raised as to whether KPMG is legally allowed to sell the slots, or if they should revert to the slot pool and be allocated by the Airport Coordination Limited (ACL). The judicial ruling will focus on the validity of Monarch's Air Operators Certificate (AOC) which the UK Civil Aviation Authority (CAA) suspended, but did not revoke, on the carrier's entry into bankruptcy earlier in October.
Should the courts rule that an airline must hold a valid AOC to possess airport slots, then Monarch's would automatically revert to the ACL pool for reallocation. This would then significantly prejudice creditor firms, among which is former owner Greybull Capital, hoping to use the slots' sale to recover at least some of their debts from Monarch.
IAG International Airlines Group has already announced plans to apply for the slots should they be made available. Group chief executive Willie Walsh recently told the Telegraph that IAG could also get new entrant slots for its airlines not yet serving Gatwick such as low-cost carriers LEVEL (Barcelona El Prat) or Iberia Express (I2, Madrid Barajas).
