R. (on the application of Monarch Airlines Ltd (in administration)) v Airport Coordination Ltd

The Court of Appeal considered the meaning of "air carrier" in Council Regulation (EEC) No 95/93 (the Slots Regulation) and the limits of a coordinator's role in allocating airport slots. The court held that an undertaking does not cease to be an "air carrier" for the purposes of the Slots Regulation merely because it has entered administration or lacks a realistic prospect of resuming operations at the relevant moment; the definition should not be read as imposing on coordinators a fact-sensitive, investigatory duty to assess financial viability or prospects of resumption. The Court emphasised that matters relating to financial fitness and operating licences are the province of the licensing regime (Regulation (EC) No 1008/2008) and the competent licensing authority. Applying those principles, Monarch remained an "air carrier" when slots were allocated and was entitled to the slots claimed under the Regulation's provisions (notably Article 8(2) and related provisions).

Background and parties:

• The appellant, Monarch Airlines Limited (in administration), sought allocation of summer 2018 airport slots at Gatwick and Luton on the basis of historic precedence under the Slots Regulation.
• The respondent, Airport Coordination Limited (ACL), the airport slot coordinator, declined to treat Monarch as entitled to allocation while the Civil Aviation Authority (CAA) proposed suspension or revocation of Monarch's operating licence; ACL reserved the slots pending outcome.

Procedural posture:

• Monarch applied for judicial review on 26 October 2017. The Divisional Court (Gross LJ and Lewis J) granted permission but dismissed the claim ([2017] EWHC 2896 (Admin)). Monarch appealed to the Court of Appeal.

Relief sought:

• Declarations that Monarch was entitled to the relevant slots and that ACL could not lawfully delay allocation; and a mandatory order requiring ACL to allocate the slots immediately.

Issues framed by the Court:

1. Whether Monarch had ceased to be an "air carrier" within the meaning of the Slots Regulation.
2. Whether, even if still an "air carrier", allocation should be denied as inconsistent with the Regulation's purposes.
3. Whether relief should be withheld in the exercise of the court's discretion.

Court's reasoning and findings:

• The court analysed the Slots Regulation (including Articles 2, 8, 8a, 10 and 14) and the Licensing Regulation (Regulation (EC) No 1008/2008) and concluded that the Slots Regulation did not intend coordinators to undertake complex enquiries into an undertaking's financial prospects or to supplant the licensing authority. The Divisional Court's approach, which would remove an undertaking from the definition of "air carrier" when it had ceased operating and had no realistic prospect of resuming, would force coordinators into fact-sensitive prognoses and risk arbitrary results dependent on timing and jurisdiction.
• The court preferred an interpretation under which an undertaking may remain an "air carrier" for slots purposes notwithstanding administration or very limited prospects, and where issues of licensing and financial fitness remain for the competent licensing authority (the CAA).
• The court rejected the submission that allocating slots to Monarch would necessarily frustrate the Regulation's purposes and found no separate part of the Regulation that authorised ACL to refuse allocation for that reason.
• On discretion, the court concluded it would not refuse relief; it accepted Monarch's evidence that allocation could facilitate monetisation of assets and potentially a sale and that futility or other discretionary bars were not made out.

Disposition:

• The appeal was allowed. The Court granted relief in the terms sought, including a declaration of entitlement to the claimed slots and a mandatory order requiring immediate allocation.

Appeal allowed. The Court concluded that Monarch remained an "air carrier" under the Slots Regulation when slots were allocated and that ACL had no duty to make a fact-sensitive inquiry into Monarch's financial prospects or to refuse allocation on that basis; licensing and fitness issues fall to the licensing authority. Accordingly Monarch was entitled to allocation of the claimed slots and the appeal was allowed so as to grant the declarations and mandatory relief sought.

Appeal from the Divisional Court (Gross LJ and Lewis J) Administrative Court decision dismissing Monarch's claim for judicial review ([2017] EWHC 2896 (Admin)). The Court of Appeal allowed the appeal ([2017] EWCA Civ 1892).