Monarch granted last-minute ATOL licence extension

The Civil Aviation Authority (CAA), which regulates airlines, has renewed Monarch's licence until Wednesday 12 October, giving it more time to get its finances together as it seeks a full renewal of the licence.

Monarch said that in addition to the new investment it has already received from shareholders, it is close to announcing "the largest investment in its 48-year history".

The renewal of Monarch's licence, which was due to expire at midnight tonight, had looked in doubt amid what the airline described as "negative speculation" about its financial health.

Passengers due to fly this weekend have been contacting Monarch all day on social media unsure if they should turn up at airports, as the removal of its licence would have meant many flights would have been immediately grounded.

What does the licence extension mean for Monarch?

Monarch staff and passengers alike will be breathing a sigh of relief at the news that its licence has been extended – it means Monarch flights will continue to operate as normal.

It is important to note though that this is only a temporary extension.

A CAA spokesperson says: "The CAA has granted Monarch a 12-day extension to its existing ATOL licences. The CAA was able to do this by requiring the shareholder to provide additional funding and because customers' money will be protected.  

"Monarch now has 12 days to satisfy the CAA that the group is able to meet the requirements for a full ATOL licence."

I've booked a Monarch flight – what protection do I have?

ATOL protection means you're guaranteed a refund if a company collapses, and importantly you'll be found an alternative flight home if stranded abroad.

But not all flights are ATOL-protected, so it's important to check. If you book a flight with Monarch (and it's not part of a wider package), you'll be ATOL-protected if you were in the UK when you booked the flight and the flight departs from the UK. (If you book a return and the first leg's ATOL-protected, the flight back will be too.)

With package holidays sold by Monarch, you'll always get ATOL protection – every UK travel company which sells package holidays is required to hold an ATOL (which stands for Air Travel Organiser's Licence).

Once you've booked a flight or holiday which is ATOL-protected, you'll receive an ATOL certificate by email, or occasionally by post. If you don't get a certificate, your booking's not ATOL-protected.

Would I still be protected if Monarch's unable to get a full licence renewal?

ATOL protection applies so long as the airline had a valid ATOL at the point you booked. So even if Monarch were to fail to have its licence renewed on 12 October, you'll be covered in the event of cancellation.

Bear in mind though that if Monarch were to lose its licence, anyone who booked a package holiday or ATOL-protected flights with the airline faces the prospect of having their trip cancelled, although they will receive a full refund.

What's the safest way to book flights?

We always suggest paying for a flight on a credit card, as that way you'll often receive extra protection.

That's because when a transaction's for at least £100 (but not more than £30,000) and you pay for it using a credit card, Section 75 of the Consumer Credit Act means the card company's equally liable with the retailer/seller if something goes wrong. (If you book a return flight, the total value must be at least £100 – if you book flights individually, each must be at least £100.) See our Section 75 guide for full help.

Flights costing less than £100 booked on a credit card, or any flights booked with a debit card, may still get some protection via the 'chargeback' scheme – see our Chargeback guide for more.

What does Monarch say?

In a statement on the airline's website, Monarch CEO Andrew Swaffield says: "I am delighted that we have been able to come to an agreement with the CAA on the extension of Monarch's ATOL licence and am excited about the additional capital coming into the group which will help us fund our future growth.

"I am immensely proud of the professionalism of the Monarch team."