Monarch Airlines Ltd, R (on the application of) v Airport Coordination Ltd

An undertaking does not cease to be an air carrier merely because it is temporarily unable to operate, has ceased operating, or has no realistic prospect of resuming operations. The Slots Regulation provides no workable test requiring a coordinator to assess those matters. Questions concerning financial viability and the ability to continue in business are principally for the licensing process. The purposes of the Slots Regulation cannot independently confer a power to refuse allocation where the text supplies no such power. An undertaking which remains an air carrier and satisfies the historic-precedence conditions is entitled to the relevant slots under article 8(2).

Monarch Airlines entered administration after requesting summer 2018 airport slots on the basis of its previous use. Airport Coordination Ltd declined to allocate the slots, pending proposed regulatory action concerning Monarch’s operating licence.

The Divisional Court granted permission for judicial review but dismissed the claim, holding that Monarch was no longer an air transport undertaking or an air carrier. Its decision is reported at [2017] EWHC 2896 (Admin). Monarch appealed on whether it remained an air carrier, whether the purposes of the Slots Regulation independently justified refusal, and whether relief should be withheld as discretionary or futile.

Appeal allowed. The Court held that Monarch remained an air carrier and was entitled to the slots it had claimed.

1. Meaning of air carrier. The definition in the Slots Regulation does not require an undertaking to be actively operating air transport services at the relevant time. The Regulation provides no principled or workable line between an undertaking temporarily unable to operate and one with no realistic prospect of resuming operations. A failed or collapsed airline may still be an air transport undertaking.
2. Role of the coordinator. The coordinator’s remit is limited. The Regulation does not require it to investigate an undertaking’s financial position, prospects of rescue, pending transactions or prospects of resuming operations. Such an investigative and regulatory role would conflict with the speed and flexibility required of coordinators. The reasoning in R v Airport Co-ordination Ltd ex p. The States of Guernsey Transport Board is consistent with that conclusion: [1999] Eu LR 745. The licensing regime, including its procedural safeguards, is the appropriate mechanism for dealing with financial viability and licence revocation. The administration authorities also showed why future prospects could change, as illustrated by Key2Law (Surrey) LLP v Gaynor De’ Antiquis: [2011] EWCA Civ 1567; [2012] BCC 375.
3. Purpose. The purposive principle in Adidas AG, Case C-223/98; [1999] 3 CMLR 895, assists where a provision is open to competing interpretations. It does not create an independent power for ACL to refuse allocation where no such power appears in the Regulation.
4. Relief. Monarch was entitled under article 8(2) to the relevant slots. The Court was not satisfied that allocation would be futile, and the slots might retain value in an exchange or acquisition. It therefore granted a declaration that Monarch was entitled to allocation and a mandatory order requiring ACL to allocate the slots immediately.

• Court of Appeal (Civil Division) allowed Monarch’s appeal and held that it remained an air carrier entitled to the relevant slots.
• High Court of Justice, Queen’s Bench Division, Administrative Court dismissed the judicial review claim, holding that Monarch was no longer an air carrier: [2017] EWHC 2896 (Admin).