Monarch Airlines Ltd -v- Airport Coordination Ltd Anor

An airport coordinator is not required to allocate historic slots to an insolvent undertaking which has ceased operating air services and has no realistic prospect of resuming them. The definition of an air carrier requires more than a formally valid operating licence: the undertaking must be engaged in, or realistically capable of resuming, the provision of air transport services. Historic use and a secondary market in slot exchanges do not alter that conclusion. Where the coordinator has sufficient information to conclude that the applicant is not entitled to the slots, it must act on that conclusion and cannot defer allocation pending separate regulatory proceedings. The slots must instead be placed in the slot pool.

Monarch Airlines entered administration on 2 October 2017. Its air operator certificate was provisionally suspended, it had no aircraft and almost no pilots, and the Civil Aviation Authority had begun proceedings concerning its operating licence. Monarch nevertheless claimed priority to summer 2018 airport slots under Article 8(2) of Council Regulation (EEC) No. 95/93, relying on its previous use of the slots and its formally valid operating licence.

Airport Coordination Limited declined to allocate the slots immediately and deferred its decision pending the CAA process. Monarch sought judicial review. Manchester Airports Group plc intervened, principally arguing that the slots should be allocated or placed in the pool without further delay. The court considered whether ACL had a duty to allocate, whether it could defer its decision, and the proposed exchange of slots with other airlines.

1. Permission and outcome. Permission to apply for judicial review was granted, but the claim was dismissed. The summer 2018 slots were to be placed in the slot pool.
2. No duty to allocate. The Slots Regulation had to be interpreted purposively. Its object was to facilitate the operation of air transport services by functioning airlines. A secondary market in slot exchanges did not extend the scheme to an insolvent company that was no longer engaged in air services and had no realistic prospect of resuming them.
3. The Article 8(2) historic-precedence provision was directed to continuity and stability of air transport services. It did not reward historic use independently of future operation or facilitate recovery for an airline’s creditors. The phrase “air transport undertaking” in the definition of “air carrier” had to be given meaning. It required an undertaking engaged in providing air transport services, not merely one holding a licence that had not yet formally been revoked.
4. On the facts, Monarch had no aircraft, no pilots capable of operating the airline, and no more than a theoretical possibility of resuming operations. It was therefore outside the relevant definition and ACL owed no duty to allocate the claimed slots.
5. Guernsey States. R v Airport Co-Ordination Ltd, Ex p. The States of Guernsey Transport Board concerned an exchange between subsisting air transport undertakings. It did not govern allocation to an undertaking that had ceased to be an air transport undertaking, and was distinguishable.
6. Power to defer. Whatever flexibility ACL might possess in other cases, it could no longer defer the decision. By the ordinary allocation date ACL had the necessary information and had formed the correct view that Monarch was not entitled to the slots. Further delay would sterilise or distort the market and prejudice third parties. The slots therefore had to be placed in the pool.
7. The court did not decide the proposed discretionary-relief issue because the claim failed on the duty-to-allocate issue. The anti-deprivation principle was accepted to be irrelevant. The subsequent revocation of Monarch’s operating licence did not form part of the decision, although it fortified the court’s view.