British Airways owner International Airlines Group (IAG) is to buy the majority of the take-off and landing slots left vacant at Gatwick Airport by collapsed airline Monarch, while Wizz Air is in line to take the summer slots at London Luton.
The deal will allow IAG to expand British Airways' presence at the airport, increasing the frequency of summer and winter services and enabling it to fly additional routes.
Administrators from KPMG, who were appointed in early October to handle the affairs of Monarch, have not disclosed the purchase price, but the slots are understood to be among Monarch’s most valuable assets.
Blair Nimmo, partner at KPMG and joint administrator, said: “As well as representing an excellent recovery for creditors from one of Monarch Airlines’ significant assets, the clarity that this sale will bring is very positive for other stakeholders such as Gatwick Airport and its customers.”
Although IAG said the slots would primarily be used by BA, the purchase could potentially allow the group to expand services offered by Iberia and Aer Lingus.
Following completion of the transfer of its Gatwick slots to IAG, the administrators have confirmed that they are in the process of completing an exchange of the summer Luton slots with Wizz Air.
Nimmo added that the focus now was to explore “potential rescue opportunities” for Monarch and its residual assets, including the brand. The administrators won a legal battle to sell the slots on 22 November, overturning a High Court ruling that prevented them from doing so.
As reported this week by Routesonline, Monarch collapsed owing about £465m to unsecured creditors, which include airports and suppliers. It also had a secured debt of about £167m, with private equity firm Greybull owed about £160m and the UK’s Pension Protection Fund owed £7.5m.