The licence is due for renewal on Friday, with aircraft from US airlines supposedly positioned at Gatwick and Spain on standby for any repatriation flights. The carrier however strenuously denied speculation circulating on social media suggesting that it was in financial trouble at the weekend.
Monarch operates as a scheduled airline, but has held an Atol since 2014, as credit card providers have insisted that it uses the government-run financial protection scheme.
Monarch, which recorded a £40 million underlying profit in 2015 on the back of low fuel prices and cost-cutting, has had to switch a lot of capacity from Egypt and Tunisia this summer.
The carrier said this week it was on course to make a profit this year ending October 2016, but added: “To weather tougher market conditions and to fund its ongoing growth, Monarch expects to announce a significant investment from its stakeholders in the coming days.”
The CAA said it would not comment on specific cases but a spokesperson added it had “robust contingency plans for a wide range of potential issues”.
A Monarch spokesperson said they did not wish to comment further.