Affirma Insurance is processing “20-25 claims” from large companies, including some from consortia, following Monarch’s failure on October 2.

Its head of commercial partnerships, Lawrence Assock, told TTG: “Claims will be in the millions, but how many millions, we don’t know.”

And he revealed that while a “handful” of Affirma clients had complete Supplier Failure Insurance that repays the full amount for rebooked flights, most had only the basic policy that refunds the original flight price.

Meanwhile, Alan Bowen, legal advisor to the Association of Atol Companies, said “some people have not been looking at what they were agreeing to”.

He said one of his clients had made £70,000 worth of bookings with Monarch Airlines flights, but that the client was only covered for £12,000.

Bowen added he expected there were “a lot of people who will have lost a lot of money with the collapse of Monarch”.

Monarch’s failure has also been linked to the collapse of Essex-based Chadwell Travel last week.
The agency, which traded as A1 Travel, is thought not to have had supplier failure insurance in place at all, meaning that it had to incur the costs of rebooking flights for packages sold using Monarch.

Assock said: “If they had [had supplier failure insurance in place], they would have at least been able to claim for the price of the Monarch flights. It sounds to me that they did not have anything in play.”

A separate expert source told TTG that the failure of Monarch was “the last straw for A1 Travel”, but added there were unlikely to be similar failures. “There will definitely be companies affected financially but they will survive,” he said – a view echoed by Bowen.

The CAA said Chadwell Travel had “around 6,000 forward bookings” and several thousand customers abroad. The timing of Monarch’s failure, as agents’ cash flow dwindled after the summer, was also critical, it is understood.

Chadwell Travel primarily sold holidays to Spain, Greece and Turkey.

The CAA has made arrangements with Broadway Travel to protect existing Atol bookings. In a statement, the CAA said: “Unfortunately some customers who had holidays booked through Chadwell Travel with a Monarch flight may not be able to travel if alternative acceptable flights cannot be found. In this event these customers are entitled to make a claim under the Atol scheme.”