Beleaguered airline Monarch has been thrown a lifeline with a two-week extension to its permit to sell holidays and flights in the UK.
The Civil Aviation Authority (CAA) said last night it would grant the budget airline a temporary license under the Air Travel Organisers' Licensing (Atol) scheme until mid-October after the company said it was on the brink of lining up its biggest ever cash injection.
Atol protection offers customers guarantees that should the company they booked travel through go bust, they will not be stranded overseas and will not lose out financially. Every company in the UK which sells holidays which involve air travel or standalone flights has to have an Atol license and the CAA only issue them to firms they believe are solvent.
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Monarch's new temporary permit will run until 12 October. In a statement, the air travel regulator said: "The CAA was able to do this by requiring the shareholder to provide additional funding ... Monarch now has 12 days to satisfy the CAA that the group is able to meet the requirements of a full Atol license.
"During this period of extension, the CAA will continue to monitor the company."
Monarch, which is owned by turnaround specialists Greybull Capital, said it was due to announce its "largest investment in its 48-year history" which the company plans to use to order a fleet of more than 30 airlines and heave itself out of the financial stress which has plagued them since the financial crisis.
The latest woes come amid falling demand for holidays in Turkey and Egypt in the wake of political unrest. Reports suggest that around 100,000 UK citizens are currently overseas on Monarch holidays.