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British Airways is set to ramp up the number of flights from Gatwick airport next summer after its parent, International Consolidated Airlines, held off competition to buy 20 take-off and landing slots from collapsed carrier Monarch Airlines.

IAG said late on Monday that it was completing the acquisition of Monarch’s portfolio of summer and winter slots. It said the deal would enable its airlines — primarily British Airways — to launch “new destinations and extra frequencies” from Britain’s second airport from next February. Rival airlines EasyJet, IAG, Wizz Air and Norwegian Air Shuttle had previously expressed interest in acquiring the slots.

The sale comes just days after Monarch administrators KPMG won an appeal against a previous High Court ruling that stripped Monarch of the rights to sell its valuable airport slots at Gatwick and Luton. Industry estimates value the slots at the two airports at about £60m.

KPMG said it would now focus on the disposal of Monarch’s Luton slots and realising any “potential rescue opportunities for Monarch and its residual assets including its brand and associated licences”. In October, Monarch became the third European airline to enter administration within the space of six months.

IAG, which also owns Aer Lingus and Vueling, refused to disclose the price it paid for the Gatwick slots, saying it was commercially confidential.

The deal will give IAG airlines, in particular BA, a significant boost at the south of England airport. BA already has roughly 16 per cent of Gatwick flights, while Monarch had 4.5 per cent of slots available last summer.

The deal also comes after it was revealed last week that 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 on Friday that 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, which owns Monarch’s pension scheme. In total, Monarch has 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 Financial Times analysis.

Blair Nimmo, a partner at KPMG and joint administrator, said: “As well as representing an excellent recovery for creditors from one of Monarch Airline’s significant assets, the clarity that this sale brings is very positive for other stakeholders such as Gatwick airport and its customers. Our continuing focus is now on MAL’s Luton slots, as well as exploring potential rescue opportunities for MAL and its residual assets including its brand and associated licences.”

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