The implosion of Monarch has triggered a furious travel industry row over the cost of bringing 85,000 stranded holidaymakers home, after taxpayers were hit with a £60 million bill.

Tour operators and travel agents have this weekend attacked the Air Travel Organisers Licence (Atol), the official fund designed to act as a safety net for stranded holidaymakers, after 19 out of 20 Monarch passengers who booked direct with the airline and were not covered were brought home for free anyway. 

Monarch stopped paying in last December as part of cost-saving efforts by its owner, the turnaround fund Greybull. The taxpayer-funded airlift has sparked anger and questions over the £2.50 per booking levy on package holidays that helps fund Atol.

Mark Tanzer, chief executive at the Association of British Travel Agents (Abta) said it “certainly had no say” in the Government’s decision to pay to bring home Monarch’s customers or the subsequent attempts to try to recoup some of the money. 

“This is completely unsatisfactory,” he said. “The taxpayer will end up picking up a large bill, whatever happens, and the industry is left wondering what is the point of Atol protection if everyone gets brought home anyway? And it sets a precedent for the next airline failure, where customers will expect the same free repatriation.”

What is ATOL, and how does it work?

Atol was created in 1973 as foreign package holidays incorporating both flights and accommodation became more common. A series of failures left Britons stranded abroad and it was decided a safety net was required, 

although this does not extend to the more modern concept of holidaymakers creating their own packages by buying a flight and accommodation separately and does not always apply to flight-only bookings. 

The industry has also been further angered by attempts from the Department for Transport (DfT) to recover some of the cost of the rescue flights from package tour providers.

It is understood the DfT has asked companies for £250 per seat even though in some cases this could be considerably more than a third-party carrier would have paid Monarch for flying the passenger back home on their scheduled return flight.

The six graphs that explain why Monarch went under

Such a level could be particularly punitive for smaller travel agents amid Abta’s 1,200-strong cohort which do not, unlike their larger tour operator cousins, run an airline and therefore use a third party carrier like Monarch for every holiday they sell.

The CAA organised the Monarch airlift which is reputed to be the biggest repatriation since Dunkirk. Cash for the operation came from the aviation regulator’s own budget but it is seeking recompense from the DfT.

It is understood the DfT and CAA are considering how protection could be extended to create a more comprehensive safety net, though no formal discussions have begun. The DfT said it was working to recover its costs.