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Monarch administrators to appeal after unfavourable slots ruling

Administrators for Monarch Airlines plan to appeal a court decision dismissing their claim for the right to sell the collapsed UK leisure carrier's slots.

KPMG, which was appointed administrator after Monarch ceased flights in the early hours of 2 October, had turned to the UK High Court in a bid to secure the right to the slots.

The airline operated out of five UK airports, including the London airports of Gatwick and Luton, and there has already been rival carrier interest in the slots.

These slots had been set to fall back into the slot pool for summer 2018, to be distributed by UK slots co-ordinator ACL, before administrators launched a judicial review late last month.

But the court, judging there was no more than a theoretical possibility of Monarch emerging as a going concern or resuming air services, rejected the claim that ACL is "under a duty to allocate" summer 2018 slots to the carrier by reason of historical precedence.

The court judges any such duty would not accord with the purpose underlying slots regulations and that Monarch "falls outside the language" of the slots regulation.

"It is one thing to permit a 'secondary market' in slots. It is another to extend it to companies in insolvency, in circumstances such as those outlined here," it adds.

The ruling says that whatever flexibility and discretion ACL may hold to reserve or postpone a decision, delaying a decision on summer 2018 slots would distort part of the market to the potential detriment of third parties.

"The consequence of our decision is that the summer 2018 slots are to be placed in the slot pool," it adds. Whilst dismissing the claim, it has left leave for an appeal.

"We are disappointed with today's ruling and will be seeking leave to appeal as a matter of urgency," states Blair Nimmo, partner at KPMG and a joint administrator for Monarch.

Airline body IATA backed the ruling. "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," it says. "Non-airline entities should not be allocated slots for the sole purpose of selling them – slots should only be given to airlines for operating flights."

Monarch's Gatwick slots are expected to attract the most interest. Willie Walsh, chief executive of British Airways parent IAG, has already said it would be interested in the Gatwick slots, either through the slot pool allocation or by acquisition from the administrators.

The chief of Icelandic carrier Wow Air has likewise indicated interest. "We just announced Stansted as our new London destination so we would love to continue to grow in Gatwick as well, so if you know how we can our hands on those slots, let me know," Skuli Mogensen said on 6 November during a panel debate at the World Travel Market in London.

Wizz Air chief executive Jozsef Varadi, speaking during a first-half results briefing earlier today, said the central European budget airline was "contemplating" the Monarch slots. "We need to understand what's going on with those slots," he says, but adds that the carrier's interest in Monarch's slots is "limited" to Luton operations.

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