Tolhurst was quizzed by MPs on Wednesday (20 May) about the travel sector’s response to the coronavirus pandemic alongside CAA chief executive Richard Moriarty, who confirmed the authority had launched a review of airline refund practices.

Pressed by MP Simon Jupp on whether vouchers or refund credit notes (RCNs) – issued in lieu of a cash refund – were protected against insolvency, Tolhurst said it "depended on the contract between the customer and the operator".

"You have the Package Travel Regulations which cover holidays and may have an airline element within it," said Tolhurst. "And then you have the EU [regulation] 261 which is just the air ticket refund – that is not backed by any government insolvency protection.

"It is the Package Travel Regulations where [there] is the Atol support so that is true, depending on the contracts between the customer and the operator."

The travel sector has, for months, been seeking formal confirmation from the government and the CAA that any insolvency protection that exists at the point a consumer purchases a travel package carries over to a RCN or voucher.

Abta insists this is set out in the terms of the Atol scheme, but has called on the government and CAA to make this explicit. As an interim measure, Abta has devised a temporary RCN regime with strict guidance on how RCNs should be issued to ensure best practice.

Tolhurst added: "It’s something we are working on – at pace – within the department. I think one of the asks [from the sector] has been very much around vouchers being underwritten rather than refunds.

"It’s quite complex. I know some other countries have done it, some haven’t. We’re trying to work with HM Treasury to get a policy outcome in relation to that."