A government-commissioned review will be kicked-off today following Monarch Airlines' collapse last October.
The Airline Insolvency Review has published a call for evidence to examine reforms needed to ensure passengers are protected when airlines fail.
As demand for air travel rises, the risk to passengers of a similar collapse happening again has risen, those conducting the review said.
Monarch was Britain's biggest airline failure, falling into administration after turnaround owners Greybull failed to find a buyer. Around 110,000 customers were left stranded in the early hours of 2 October while 14,000 were left disappointed as they turned up to the airport.
Authorities sprang into action as contingency plans were triggered, sparking what transport minister Chris Grayling called Britain's "biggest ever peacetime repatriation".
"The Monarch failure showed the importance of passenger protection against the failure of their airline," said Airline Insolvency Review chair Peter Bucks.
We saw how effective the operation to repatriate passengers was, but the experience also brought home the limitations of the current protection arrangements that we will need to address.
Greybull was subject to significant criticism in the wake of Monarch's failure while many questioned why the taxpayer had to pick up the £60m bill to return passengers back to the UK.
KPMG partner Blair Nimmo, Monarch's lead administrator, admitted to regrets that the airline's 2,100 staff could not be told of the insolvency before it was publicly reported.
The review will ask whether passengers are furnished with sufficient protection – and knowledge of it – against the failure of an airline in the future.
"This call for evidence is aimed at stimulating thinking and sets out the process by which the review will engage with the views of airlines, their passengers and others with an interest," said Bucks.
"We are approaching these complex problems with an open mind and are keen to hear from all with ideas."