Monarch Airlines has been granted a 24-hour extension to its ATOL licence, meaning its flights and package holidays will continue to operate as normal today amid uncertainty over its future.

The Civil Aviation Authority (CAA), which regulates airlines, said ATOL protection will continue to apply to any holidays booked with Monarch until 11.59pm on Sunday. A further update is expected later on Sunday.

Update 8.00am Mon 2 Oct: Monarch Airlines has gone into administration and all its holidays and flights have been cancelled with immediate effect. See our MSE News story for the latest info and your rights.

Responding to worried customers on Twitter, Monarch said: "Our flights are operating as scheduled today. Any changes to the forward schedule will be communicated to all customers."

It is Monarch's second such temporary ATOL extension in two years and follows a spotlight being shone on the carrier's finances.

For full info on ATOL protection and your rights, see our Holiday Rights guide. We'll continue to update this story throughout today.

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'Be extremely wary of booking a flight today'

Martin Lewis, founder of MoneySavingExpert.com, said: "Without wanting to scaremonger, quite frankly be extremely wary of booking a standalone Monarch flight today given the current uncertainty.

"If you book a package holiday today, you will at least have ATOL protection. But if you're booking a flight only, I'd hold off a day until we know more clearly the future of the company – or book elsewhere.

"If Monarch really is your only option and you must book today, make sure you pay with a credit card, so you at least have Section 75 and possibly chargeback protection." 

I've booked a package holiday – what protection do I have?

All UK firms selling holidays with air travel must be signed up to the ATOL protection scheme, which is run by the CAA (ATOL stands for Air Travel Organiser's Licence).

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.

If you've booked a package holiday with Monarch – or if you book one today – you will have ATOL protection, and you'll have received an ATOL certificate by email or post confirming this. ATOL protection applies if you got it when you booked – even if a company subsequently loses its ATOL licence.

Bear in mind though if the worst happened, while ATOL protection would ensure you get a full refund for your holiday, it could still be cancelled and you'd need to rebook. ATOL protection also wouldn't cover other elements you may have booked completely separately, such as car hire.

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

Most booking with Monarch are for flights only, and if you've a flight-only booking, the CAA's confirmed to us today you WON'T have ATOL protection.

If Monarch was to lose its ATOL licence, in theory that would only affect passengers who've booked a package holiday – a small proportion of its total customers – and it could continue to fly flight-only passengers.

So it's possible flights could continue as normal. But in practice it's unclear what the wider implications for the company would be.

If you've a flight-only booking and the worst was to happen, your protection's likely limited:

  • It would be worth checking if you're covered by your travel insurer, but many policies won't cover you unless you've bought specific travel firm failure cover.
  • If you paid with a credit card and your flight cost at least £100, 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.

If you're already abroad then it's unclear what options you would have – you could have to find your own alternative flight home.

What does the CAA say?

In a statement the regulator said: "In line with our usual practice, we will not comment on the specifics of any ATOL holder's application until such time as the process has reached a resolution.  

"However, we can confirm that ATOL protection will remain available for eligible holiday bookings made with Monarch on Sunday.

"The CAA will provide a daily update with regard to the protection that is available to Monarch's customers."

Additional reporting by the Press Association.

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