Common use of Preliminary Remarks Clause in Contracts

Preliminary Remarks. The next sections illustrate the role of slots in several types of financial operations, including bankruptcies and insolvencies of airlines as well as take-overs, as previously referred to in section 5.2.2 above. As a result of COVID-19, several airlines have entered into financial proceedings.1056 Airline bankruptcies and/or airlines ceasing operations are, however, a perennial issue resulting from market dynamics in a broad sense and are not necessarily related to the COVID-19 pandemic. The slot rules would benefit greatly from clarity as to whether airlines entering bankruptcy proceedings should be able to hold and sell slots purely to raise finance to repay creditors. 1055 See Chapter 2, sections 2.2.2 and 2.2.3 for an overview of the capacity declaration and allocation processes respectively. 1056 See Eurocontrol, What COVID-19 did to European Aviation in 2020, and Outlook 2021, Aviation Intelligence Unit, Think Paper #8 (2021). Several pre-COVID-19 related court judgments and developments following the financial distress of, inter alia, Air Berlin and Monarch Airlines, will be analyzed below, since these cases have contributed to the ongoing debate amongst industry parties and regulators on the role, and the legal status, of slots in the event of airline bankruptcies and airlines ceasing operations for other reasons. The Monarch-case constitutes a particularly important precedent for the management of slots in financial proceedings as well as for legal analysis pertaining to secondary slot trading, to wit that a defunct airline is able to obtain and trade slots.1057