Defunct airline Monarch has lost a High Court battle to sell “valuable” runway slots to raise money for creditors.
Monarch collapses last month leaving hundreds of thousands of customers out of pocket. Administrators were hoping to sell off the runway slots – worth an estimated £60 million – to other airlines.
The slots, which allowed Monarch to fly out of five UK airports, were due to go back into the slot pool. Monarch argued that it had the rights to the slots and should be allowed to sell them off to raise capital.
But the High Court ruled against the carrier, ruling instead that slot overseer Airport Coordination Limited (ACL) should reallocate the slots to new bidders.
Lord Justice Gross and Mr Justice Lewis said ACL was under no obligation “to allocate summer 2018 slots to Monarch by reason of historical precedence (grandfather rights)”.
Monarch’s administrators indicated that they would appeal the decision “as a matter of urgency”.
The ruling hurts both Monarch’s paying customers and Greybull Capital, the private equity firm which used to own the airline and its principal secured creditor.
A Greybull spokesman told The Times: “This is a matter for KPMG acting as administrators. Greybull can do little more than await the outcome of the process.”
Consumers who bought package holidays with an ATOL certificate will have financial protection, but the vast majority of holidaymakers – around 95 per cent – with flight only deals will be listed as unsecured creditors.
Commenting on the ruling, 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. Accordingly, the consequence of our decision is that the summer 2018 slots are to be placed in the slot pool.”
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