Abta is to hold talks with the government to highlight flaws in the “narrow view” it takes with the Atol system in a bid to ensure lessons are learned from the collapse of Monarch, the association’s chair has said.

Some 110,000 customers were due to be repatriated by the CAA on government orders following Monarch’s failure early on Monday morning – regardless of whether they were protected by Atol [on package holidays] or were travelling on seat-only bookings [which are not protected under the scheme] – at an estimated cost of £60 million.

Abta chair Noel Josephides praised the CAA and the government’s “incredible response”, and said the “efficiency” of the repatriation in the wake of the collapse was “to be admired”. However he also highlighted the flaws of the Atol scheme, and said the decision to repatriate all Monarch customers “made a nonsense of the requirement of Atol financial protection”.

“I think a lot of us feel that the Atol system has been undermined,” Josephides told TTG. “It’s about time the government realised that airlines are extremely risky businesses.

“Twelve years ago the CAA recommended a levy on all outbound flights of £1, which was turned down by the House of Commons. If that had been put in place we would not have the current problems [instead the CAA introduced the current £2.50 levy which applies to package holidays and Flight Plus bookings.]

“Of the 110,000 people that are to be repatriated, only 20,000 are covered by Atol. The rest are seat-only,” Josephides pointed out.

“The government has to inform those consumers [flight-only] of the To step in and protect them makes a nonsense of the requirement of Atol financial protection.

“We [Abta] will certainly be talking to the government to learn from this experience… We hope it will think again [about the Atol system].”

Derek Moore, chairman of Aito, added: “We urge the government to act now to implement the simple £1 levy solution on all outbound flights. This situation should have been foreseen, and will happen again.”

The comments were echoed by Julia Lo Bue-Said, managing director of The Advantage Travel Partnership, who said the consortium was “supportive” of the Atol scheme, but added: “In this situation it shows there does need to be an overhaul as to how it is managed and funded.

“We can’t have a situation where agents and operators are paying into a fund but some customers aren’t because they are buying direct from the airline – and yet [as with Monarch] everybody is repatriated.

“The government should look at making it a level playing field.”

Gary Lewis, chief executive of The Travel Network Group, added: “It feels inherently unfair that all customers are being treated the same.”

David Moesli, the CAA’s deputy director of the Consumer Protection Group, said: “[This is] a matter for government. They are looking at changes at the moment.”