Chancellor Rishi Sunak said the move would give businesses "the certainty they need" during the coronavirus crisis.
Announcing the move on Friday (17 April), Sunak said the scheme would be kept under review – and could yet be extended further if necessary
The government’s job retention scheme allows businesses to furlough, or stand down, employees with the government paying 80% of their wages up to a maximum of £2,500 per month in grants.
The scheme was originally open for three months, backdated from 1 March through 31 May. This has now been extended to 30 June.
It comes after the government on Thursday (16 April) announced it was extending the UK’s coronavirus lockdown measures for "at least" another three weeks.
"With the extension of the coronavirus lockdown measures yesterday [Thursday], it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity," said Sunak.
"It is vital for people’s livelihoods the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.
Abta said while the government had so far been willing to engage in discussions about the flexibility of the scheme, changes would be needed as the economy moves into "recovery phase".
Within the travel sector, the furlough scheme has been seen as a double-edged sword; many businesses have taken the opportunity to stand down employees to reduce costs while there is no imminent prospect of travel or an extensive appetite among clients to book, others say furloughing staff risks harming the relationship between frontline travel staff and clients.
Additionally, some travel companies have called for the scheme to be relaxed to allow furloughed staff to perform a wider range of non-profit generating administrative or statutory functions, such as handling refund requests under the Package Travel Regulations.
The Treasury added in a statement: "The government has taken unprecedented action to help the economy and society bridge a period of national emergency so that as many people as possible can get back to work as the situation improves.
"Future decisions on the scheme will take into account further developments on the wider measures to reduce the spread of coronavirus, as well as the responsible management of the public finances."
