STATEMENT FROM ACL

Wednesday 8th November 2017

Following the decision of the Divisional Court (Lord Justice Gross and Mr Justice Lewis) today (8th November) regarding Monarch Airlines' (MAL) take-off and landing slots, Airport Coordination Ltd (ACL) has this statement:-

ACL welcomes the decision of the Court that the slots to which the administrators of Monarch Airlines (KPMG) asserted entitlement should now be returned to the slot pool for re-distribution, in accordance with the provisions of the Slots Regulation, rather than being allocated to the administrators for exchange/sale. ACL also welcomes the Court's order that Monarch pay ACL's costs in defending this claim.

ACL had intended to await the conclusion of the UK Civil Aviation Authority's proceedings to revoke Monarch's operating licence, upon which any entitlement Monarch had to slots would have fallen away.  However, it has become clear, as confirmed by the Court today, that Monarch has ceased to be an air transport undertaking and has no realistic prospect of resuming operations as such. Accordingly, it is not eligible to hold slots under the Slots Regulation in any event.

ACL recognises the commercial interests of airports and airlines (and their administrators). However, in order to fulfil its role as coordinator under the Slots Regulation it must seek to ensure that slots at congested airports are allocated to air carriers on the basis of neutral, transparent and non-discriminatory criteria, with a view not only to respecting the entitlement of existing airlines to slots, but also with a view to facilitating competition and encouraging new or existing airlines into new markets. ACL must also allocate slots with the aim of securing efficient use of airport capacity.

In ACL's view it was not consistent with its role for it to be allocating slots to an undertaking which had ceased to have any realistic prospect of operating again and whose Operating Licence was subject to a proposal to revoke by the licensing authority.

As a result of the court's decision, the slots at Manchester and Birmingham will now go back into the slot pool to be allocated 50% to new entrants and 50% to incumbent operators as required by the Slots Regulation.  The court has order a stay of its decision in respect of the slots at Gatwick and Luton until 17 November 2017, pending an application for permission to appeal by the administrators.

As a result, the slots at Gatwick and Luton which were formerly operated by Monarch remain unallocated in the short-term.

ACL awaits with interest the full judgment of the Court, and any further guidance it may provide on how the slot allocation process should best operate in accordance with the Slots Regulation in future.

Background

Slots are permissions given by a coordinator to use airport infrastructure at a particular time for take-off and landing.  Airlines which adhere to their slot times for at least 80% of the time in one Summer or Winter season are entitled to the allocation of those slots for the next equivalent season.

Monarch Airlines went into administration at 04:00 am on 2nd October and ceased operations. (Since that time Monarch's Air Operator's Certificate has been provisionally suspended. A valid AOC is required to hold an operating licence and a valid operating licence is required to hold slots.)

After some dialogue ACL advised KPMG it did not intend to allocate the summer 2018 slots to Monarch (the summer season commences on 25 March 2018).  Rather it reserved the historic slots operated by Monarch pending the conclusion of the proceedings before the CAA related to the revocation or suspension of Monarch's Operating Licence.

A judicial review of ACL's decision was sought by KPMG as Monarch's administrators, on the basis that unless and until Monarch's operating licence was revoked, it had an entitlement to be allocated slots at the same time as other airlines applying for them.

ACL was represented by Michael Crane, QC, Alex Barden, Alexander Milner and Nicolas Damnjanovic at Fountain Court Chambers and Rupert Earle, Edward Pitt and Alistair Williams at Bates Wells Braithwaite.

Airport Coordination Ltd

Media contact:

Alison Chambers, Emerald Media

Tel: 07721 882939