British Airways owner IAG has completed a deal to acquire former Monarch Airlines slots at London/Gatwick. The purchase, for an undisclosed sum, came days after administrator KPMG won an appeal to retain lucrative airport slots held by the recently failed Monarch. The firm had previously said it was “hopeful” some of the take-off and landing slots at London/Gatwick, Luton, Manchester and Birmingham, worth an estimated £60m and described by KPMG’s lawyers as the airline’s “last valuable asset”, could be sold to pay company creditors. Monarch, the UK’s fifth-biggest carrier, ceased operations in early October after running into financial difficulties, leaving thousands of passengers stranded overseas.
The successful appeal followed the ruling by London’s High Court that as Monarch is not flying and is unlikely to do so in the future, Airport Coordination Limited (ACL) – the independent body responsible for slot allocation – had no duty to assign them slots for the summer 2018 season.
This was subsequently overturned on November 22 by the Court of Appeal, which found that Monarch was still an air carrier when slots were to be allocated in late October, and in fact remains one despite having since had its AOC revoked by the CAA. Judge Guy Newey remarked: “It may be a failed air transport undertaking but that need not stop it being an air transport undertaking.”
Reflecting on the ruling, Blair Nimmo, partner at KPMG and joint administrator said: “We are delighted. We will now progress the slot exchange transactions we have under way, whose buyers will be announced at completion.”
The successful appeal paved the way for KPMG to sell slots held by Monarch at Gatwick and Luton (the latter are still to be auctioned). It did not, however, affect those at Manchester and Birmingham, which were returned to the slot pool to be reassigned by ACL following the earlier High Court ruling.
ACL confirmed it will not appeal the decision, but expressed concerns about its implications: “The fact that a defunct airline is able to obtain and trade slots sets a worrying precedent for the future and one which will give cause for concern to airlines and airports.”