Monarch has been granted a short reprieve after being handed a licence to sell its package holidays by airline authorities for an additional 24 hours.
The lifeline means consumer protections apply on holidays sold by Monarch, the fifth largest airline in the UK, on Sunday.
The Civil Aviation Authority (CAA) granted the protection on Saturday and said it will update customers of the airline on the situation on a daily basis.
A loss of Atol protection would have added to doubts over its future, which is still uncertain as the clock ticks on a further extension being granted.
According to Sky News, British Airways owner International Airlines Group (IAG) is circling parts of the business such as take-off and landing slots if the airline was to collapse.
The Independent reported today that the company had effectively stopped selling new flights by almost quadrupling the price.
The airline, majority owned by private equity firm Greybull Capital, was in a similar situation this time last year and was handed a two-week extension.
Airlines must prove they are financially stable to gain approval from ATOL, the scheme which protects consumers in the event of a holiday firm's collapse and which they must hold to operate in the UK.