The organisation has revealed it supports a proposed amendment to the Atol Bill by Lord Rosser, to make regulations so that all passengers can be protected in the event of a future airline failure.

The issue has been brought to the fore following the government’s decision to repatriate Monarch airline passengers, regardless of whether or not they were protected by the Atol scheme. Abta has described the current regime as having “severe flaws”.

A spokesperson said: “Abta welcomes the Transport Secretary Chris Grayling’s commitment to consider potential reforms in light of the Monarch failure, and believes the Atol Bill, currently in the House of Lords, provides an early opportunity to put in place legislation to protect consumers if another airline collapses.

“Abta believes the government should consult with the industry and consumers to determine the precise model for delivering any new consumer protection scheme, for example through insurance or a parallel Atol scheme for airlines.

“Any new scheme should ensure that all passengers are protected regardless of how they booked their flights, and that subsequent costs to the taxpayer are reduced or removed entirely.”