Monarch 4
Joined: Dec 2012
Posts: 294
Likes: 7
From: leeds
As an amateur, it seems to me that unless an airline behaves in an extraordinarily foolish manner, we have reached the position where incumbents pretty much own the slots provided they use them.
Are these slot values implicitly or explicitly on balance sheet?
Are these slot values implicitly or explicitly on balance sheet?
Joined: Feb 2007
Posts: 1,197
Likes: 18
From: Various at the moment
Plumbum Pendular
Joined: Aug 1999
Posts: 1,117
Likes: 0
From: Avionics Bay
The more interesting thing is who is now going to buy them and what they are going to do with them? I hear it could be IAG, now what would they want with 20 slot pairs at LGW?
Maybe will try to level the low cost long haul playing field?
Maybe will try to level the low cost long haul playing field?
Joined: Oct 2007
Posts: 1,608
Likes: 12
From: cornwall, uk
Well if it’s IAG I suspect we will see additional 772s displaced from LHR as additional A388s arrive ex 2nd hand.
I also suspect that the trial of 2nd hand airbus short haul aircraft for the lgw base has proven successful in IAGs eyes and that we will see some A321/320s appear off the 2nd hand market.
Just a suspicion not backed by any fact at all.
I also suspect that the trial of 2nd hand airbus short haul aircraft for the lgw base has proven successful in IAGs eyes and that we will see some A321/320s appear off the 2nd hand market.
Just a suspicion not backed by any fact at all.
Joined: Jan 2005
Posts: 5,005
Likes: 175
From: Not so many places currently
Reported that TCX are interested in LGW slots
https://www.reuters.com/article/mona...-idUSL8N1NU272
https://www.reuters.com/article/mona...-idUSL8N1NU272
Joined: Mar 2007
Posts: 2,766
Likes: 4
From: Here and there
Monarch owners could profit from collapsed airline
Administrator warns secured creditors unlikely to be repaid in full
Monarch entered administration after it failed to find a buyer earlier this month © AFP
Monarch Airlines’ former owners could yet make a profit on their investment despite administrator warnings that secured creditors are unlikely to be repaid in full.
In its first creditors report since Monarch’s collapse, KPMG said the airline’s secured creditors would probably “suffer a shortfall” even once two of Monarch’s main assets — its take-off and landing slots and the airline’s engineering business — were sold.
Though it remains unclear how much money will be recovered for Monarch’s secured creditors, Greybull Capital, which has first call on the airline’s assets, could still walk away with money.
The creditors report does not detail how much money is likely to be recovered for Monarch’s secured creditors, which after Greybull includes PPF, Monarch’s pension scheme. In total, Monarch has a secured debt of about £167m, with Greybull owed about £160m and PPF £7.5m.
However, a large proportion of Greybull’s exposure was either debt assigned from Monarch’s previous owners, the Swiss Mantegazza family, or cash contributed by them. The actual cash put up by Greybull was no more than about £85m, according to a previous FT analysis.
The initial report, published on Friday evening, comes just days after KPMG won an appeal against a previous High Court ruling stripping Monarch of the rights to sell its valuable airport slots at London Gatwick and Luton. The decision was seen as a big boost for Monarch’s administrators, as selling the slots to rival airlines will help recover money for creditors.
But KPMG did not provide an estimation of how much money these slots could raise, or ascribe a value to the airline’s engineering business.
The report also noted that Monarch has about £30m in cash, and estimated the administrator’s costs to be about £10m.
At least one deal for the slots is expected to be announced early next week. EasyJet, IAG, Wizz Air and Norwegian Air Shuttle have previously signalled their interest in buying Monarch’s slots. The slots at Gatwick have generated the most interest because of a lack of airport capacity during peak times.
Greybull previously said it would expect Monarch’s pension scheme — which is owed £7.5m — to be repaid if the private equity group made any profit.
KPMG’s report said, “No distributions have been made to the secured creditors to date. Overall we consider there is likely to be a shortfall to the Company’s secured creditors.”
It added, “Whilst the slots and the engineering business have yet to be realised, in our view value is likely to break in the secured debt.”
However, KPMG said it expects preferential creditors, Monarch’s employees, to receive 100 per cent of the money owed to them.
The rest of the airline’s creditors are likely to get nothing, or just pennies in the pound.
In October, Monarch became the third carrier in Europe to enter administration this year after it failed to find a buyer for some of its assets. The collapse led the UK government to launch Britain’s biggest peacetime repatriation, flying home over 85,000 holidaymakers stranded overseas, costing taxpayers £60m.
Over the past two months, Greybull has come under pressure to foot some of the government’s repatriation bill following speculation they may end up making a profit. Last month, following public criticism from the transport secretary, the private equity group acknowledged it had a “moral obligation” to help meet the government’s costs.
The authors of the article obviously didn’t read the line about employees compensation being capped at £800.
Administrator warns secured creditors unlikely to be repaid in full
Monarch entered administration after it failed to find a buyer earlier this month © AFP
Monarch Airlines’ former owners could yet make a profit on their investment despite administrator warnings that secured creditors are unlikely to be repaid in full.
In its first creditors report since Monarch’s collapse, KPMG said the airline’s secured creditors would probably “suffer a shortfall” even once two of Monarch’s main assets — its take-off and landing slots and the airline’s engineering business — were sold.
Though it remains unclear how much money will be recovered for Monarch’s secured creditors, Greybull Capital, which has first call on the airline’s assets, could still walk away with money.
The creditors report does not detail how much money is likely to be recovered for Monarch’s secured creditors, which after Greybull includes PPF, Monarch’s pension scheme. In total, Monarch has a secured debt of about £167m, with Greybull owed about £160m and PPF £7.5m.
However, a large proportion of Greybull’s exposure was either debt assigned from Monarch’s previous owners, the Swiss Mantegazza family, or cash contributed by them. The actual cash put up by Greybull was no more than about £85m, according to a previous FT analysis.
The initial report, published on Friday evening, comes just days after KPMG won an appeal against a previous High Court ruling stripping Monarch of the rights to sell its valuable airport slots at London Gatwick and Luton. The decision was seen as a big boost for Monarch’s administrators, as selling the slots to rival airlines will help recover money for creditors.
But KPMG did not provide an estimation of how much money these slots could raise, or ascribe a value to the airline’s engineering business.
The report also noted that Monarch has about £30m in cash, and estimated the administrator’s costs to be about £10m.
At least one deal for the slots is expected to be announced early next week. EasyJet, IAG, Wizz Air and Norwegian Air Shuttle have previously signalled their interest in buying Monarch’s slots. The slots at Gatwick have generated the most interest because of a lack of airport capacity during peak times.
Greybull previously said it would expect Monarch’s pension scheme — which is owed £7.5m — to be repaid if the private equity group made any profit.
KPMG’s report said, “No distributions have been made to the secured creditors to date. Overall we consider there is likely to be a shortfall to the Company’s secured creditors.”
It added, “Whilst the slots and the engineering business have yet to be realised, in our view value is likely to break in the secured debt.”
However, KPMG said it expects preferential creditors, Monarch’s employees, to receive 100 per cent of the money owed to them.
The rest of the airline’s creditors are likely to get nothing, or just pennies in the pound.
In October, Monarch became the third carrier in Europe to enter administration this year after it failed to find a buyer for some of its assets. The collapse led the UK government to launch Britain’s biggest peacetime repatriation, flying home over 85,000 holidaymakers stranded overseas, costing taxpayers £60m.
Over the past two months, Greybull has come under pressure to foot some of the government’s repatriation bill following speculation they may end up making a profit. Last month, following public criticism from the transport secretary, the private equity group acknowledged it had a “moral obligation” to help meet the government’s costs.
The authors of the article obviously didn’t read the line about employees compensation being capped at £800.
Last edited by tubby linton; 26th November 2017 at 12:22.
Joined: Dec 2013
Posts: 144
Likes: 1
From: UK
Does the judgement mean that ACL is under an obligation to facilitate a slot exchange eg by the creation of dummy slots? Or does it mean only that if another operator at Gatwick (say) wishes to exchange less valuable real slots for more valuable Monarch slots with a cash payment, it is free to do so?
What happens to the less valuable slots which are exchanged? Do they go back into a pool which other operators can then access?
What happens to the less valuable slots which are exchanged? Do they go back into a pool which other operators can then access?
Joined: Nov 2000
Aviation Qualifications: Non-Aircrew
Posts: 968
Likes: 164
From: London, UK
You've got to wonder at IAG or at least the BA part. They repeatedly increase their LGW slot holding (eg buying Dan Air and CityFlyer) and then let their slot pool dwindle away and then pay through the nose for more slots again.
Guest
Joined: Jan 2008
Posts: 554
Likes: 44
From: UK
The BA brand at Gatwick is strong particularly the Holidays division. I expect BA will use a lot of the slots. BA have a few airbus deliveries next year. Easy enough to keep older ones longer than expected. Don't forget there are also 30 or so ex monarch aircraft seeking new homes. Perhaps a couple more 777s based at LGW too. Level have two aircraft at the moment with another 3 due but also proposed new bases in mainland Europe. I also believe BA long haul from Gatwick makes good money already. Other airlines in the group may use some of them. However for the time being I think BA at Gatwick will use most of them.