Speaking at the Abta Travel Convention today (Tuesday), Mark Tanzer said Monarch’s failure had highlighted that the current system of customer protection has a “gaping hole”.

He said the “clarity of the definition” of protection had been blurred by the multiple ways in which travel arrangements are now made.

He said two things would help bring clarity to consumer protection.

“Firstly, the CAA needs to be more transparent in its communications,” said Tanzer.

He explained that the Atol regulations stipulate that even if a travel business sells just one Atol protected package per year, it has to advertise itself as “Atol protected”.

“Only 5% of Monarch’s passengers were travelling on Monarch package holidays, yet to the outside world Monarch was an Atol protected company,” Tanzer said.

“Atol protection does not apply to a company, it applies to a particular set of holiday arrangements. And the CAA should be much clearer in telling people about this, as we are at Abta.”

Tanzer said the second point that “needs to be addressed” is the situation regarding customers who bought just airline ticket.

“There is no repatriation scheme for these customers, but the government decided that they would repatriate everyone, free of charge, and try to recoup as much as it could from Atol holders and credit card companies, who were not consulted, and certainly have had no say in the cost incurred,” he said.

“This is completely unsatisfactory. The taxpayer will end up picking up a large bill, whatever happens, and the industry is left wondering what is the point of Atol protection if everyone gets brought home anyway? And it sets a precedent for the next airline failure, where customers will expect the same free repatriation.

“Either the government sticks to the position that if you’re unprotected you’re on your own - which requires an honest communication campaign with members of the public - or they decide on principle to bring home stranded passengers, in which case they need to have a fighting fund raised by a levy on all airlines.”

He said Abta had long argued for an all-flights levy, and been “rebutted” by governments.

“Surely the Monarch example makes an unanswerable and urgent case for revisiting the issue?,” asked Tanzer.

“I was heartened by the Secretary of State for Transport’s comments in the Commons yesterday that, after the repatriation, his efforts will turn to working through the reforms necessary to ensure passengers do not find themselves in this position again.”

Tanzer concluded: “The current situation makes it virtually impossible for the customer to make an informed, rational choice, damages confidence in the industry, and is not sustainable. We look forward to working with the Department for Transport to develop a new approach to scheduled airline failure.”