Social media has been rife with rumours about the airline Monarch's financial health. The company has strongly rebuffed speculation that it could end up going bust and insists it's "trading well", but we've still had questions about your rights and ATOL protection.
We don't know the full ins and outs of how the business is faring. But we do know how to protect yourself – and that's what we're going to focus on here.
What's going on with Monarch?
The truth is, we don't know. Yet there's been intense speculation on social media about the airline's financial stability in recent days and newspaper reports that it needs to renew its Air Travel Organiser's Licence (ATOL) this week.
To be honest, finding out about corporate structures isn't what we do – we're here to save you money. So we're going to focus on your rights in the worst case scenario.
So, if the worst were to happen... what are my rights if an airline goes bust?
ATOL protection means that you're guaranteed a refund if a company goes belly up, and you'll be found an alternative flight home if stranded abroad.
Not all flights are ATOL-protected though, 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).
If an airline also sells package holidays (as Monarch does), then ATOL protection will definitely apply – in fact, every UK travel company which sells package holidays is required to hold an ATOL. So you'll definitely be covered if the worst were to happen.
Once you've booked a flight or holiday which is ATOL-protected, you'll receive an ATOL certificate by email, or occasionally post. If you don't get a certificate, your booking's not ATOL-protected.
Bear in mind though that while ATOL protection may mean you get a refund for your flight and/or package holiday, it won't cover other elements you may have booked completely separately – for example, if you've booked separate hotels or car hire.
Is my flight or holiday still ATOL-protected if an airline doesn't renew its ATOL after I've booked?
ATOL protection applies so long as the airline had a valid ATOL at the point you booked. So even if the ATOL of the airline you booked with expires before you fly, you'll be covered in the event of a cancellation.
However, if Monarch does 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.
For those that have booked flights only without ATOL protection, Monarch could theoretically continue to carry those passengers.
If an airline loses its ATOL protection, should I still book with it?
That depends on the situation and the alternative provisions the airline may put in place. If Monarch does lose its ATOL protection, we'll write a news story with full analysis then.
If I'm worried about an airline's stability, can I cancel to be on the safe side?
That would be a bad idea as you may lose your money if you cancel pre-emptively – normal cancellation charges and refund policies will apply. ATOL protection only kicks in if a company goes bust.
In Monarch's case, the airline maintains it is financially stable and that its "flights are operating as normal, carrying Monarch customers as scheduled" – so there's no reason for you to cancel.
What's the safest way to book a flight?
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 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 its website the airline said: "Over the weekend, there has been negative speculation about Monarch's financial health.
"Monarch is trading well and is expected to achieve an EBITDA [earnings before interest, depreciation and amortization] of over £40m at the end of this financial year (October 2016). This is despite a difficult period for the holiday industry due to terrorist incidents, Brexit and the resulting devaluation of sterling.
"Our flights are operating as normal, carrying Monarch customers as scheduled.
"To weather tougher market conditions and to fund its ongoing growth, Monarch expects to announce a significant investment from its stakeholders in the coming days."