Administrators for failed British airline Monarch are seeking an “urgent” appeal after losing a High Court battle over “valuable” runway slots it wants to exchange with other carriers to raise cash for creditors.
Two judges in London gave a ruling today against the ill-fated airline which went into administration on October 2. Blair Nimmo, partner at KPMG and joint administrator, said: “We are disappointed with today’s ruling and will be seeking leave to appeal as a matter of urgency.”
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.
Lord Justice Gross and Mr Justice Lewis 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 that 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”.
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.” The judge declared: “Accordingly, the consequence of our decision is that the summer 2018 slots are to be placed in the slot pool.”
After further legal argument following the announcement of the court’s ruling, the judges adjourned a decision on whether to grant Monarch permission to appeal until they give a full judgement on the action on a date to be fixed.
Earlier today, they only announced their decision with brief reasons. They refused a “stay” on their order in respect of Manchester and Birmingham airports, but granted one in relation to Gatwick and Luton until November 17, or until further order.
A Greybull spokesman said: “The legal case deals with novel and complex issues. In practice, this is a matter for KPMG acting as administrators to manage. Greybull can do little more than await the outcome of the administration process.”
Tim Hawkins, corporate affairs director at Manchester Airports Group (MAG), said: “Today’s judgement recognises just how important it is for Monarch’s runway slots to be reallocated quickly so that other airlines can operate new services at Manchester Airport next year to replace those that have been lost.
“Any further delay would have been damaging for consumers and the UK economy, and we welcome the clarity on the need for ACL to press ahead with the allocation of the Manchester slots for the next summer season.”