Grayling was grilled by the Transport Select Committee on Monday over the Monarch collapse, where he conceded it was “perfectly possible” the government could step in to bring customers home again should another airline fail, despite facing an industry backlash over an estimated £60 million repatriation bill for the carrier’s 110,000 overseas customers.

The minister also suggested there was “no way” the trade could have dealt with the fallout on its own, insisting that Monarch’s failure was “on a scale we haven’t seen before”.

“The view we took was [that] if we do not do this then we are going to have a large amount of people stranded around the Mediterranean unable to get home for a considerable amount of time, so we had no choice… that was the judgement,” Grayling told the committee.

The CAA completed its two-week repatriation programme in the early hours of Monday after operating almost 570 flights following Monarch’s failure on October 2.

Among committee members questioning Grayling was Luke Pollard, Labour MP and former Abta public affairs chief, who accused the DfT of creating a “de facto policy” for repatriation regardless of Atol protection.

Pollard, who was elected in May, rubbished Grayling’s claim that the trade could not handle the collapse, telling TTG: “Travel is an incredibly dynamic industry so I don’t recognise his description as a sector that couldn’t respond.”

He said Westminster’s actions had caused “uncertainty” around the validity of the Atol scheme in the eyes of the consumer – potentially impacting a sector that “relies upon customer confidence”.

“It flew in the face of what Atol was set up to do and it’s not what the industry needs,” added Pollard. “If the government is selectively applying its own policies without legislation to back it up, it does beg the question ‘how will they deal with the next failure?’”

Pollard said he doubted industry members would morally disagree with the repatriation but he maintained that such action had to be properly organised and funded.

He urged the trade to use the current fallout to push for answers surrounding airline failure policy such as new insolvency laws and whether Air Passenger Duty (APD) could be used to subsidise repatriation.

“There is a limited window of opportunity now with Monarch in the headlines for the industry and for politicians to be asking those sorts of questions, because there needs to be proper policy in place.”