Agents who dynamically package Monarch flights could lose out on potentially vital Atol rebates under new trading agreements.

Monarch secured a £165 million refinancing deal last October saving it from collapse and allowing it to renew its Atol licence.

As a result, the carrier took all of its flight-only seats out of Atol, hailing the move as a “clear sign of our financial stability” and saving the £2.50 per customer Atol charge.

Although the move put Monarch on a par with other scheduled airlines, new agency terms that came into force on December 15 are said to have left some agents “up in arms”.

Chris Photi, partner at White Hart Associates, said: “Many online agents sell scheduled airline seats as agent for the consumer. This results in a reduced Atol Protection Contribution of £1.25 per customer.

“Monarch appears to have offered travel agents the options of a flight-only airline agency agreement, which cannot be used for Flight-Plus packages, or an airline seat sale agreement where Atol holders can buy seats on a principal-to-principal basis.

“This will preclude agents from receiving a reduced APC charge.”

Alan Bowen, legal advisor to the Association of Atol Companies, said there was a “war of wills” between agents and Monarch.

“It’s a question of who has the power,” he added.

“The larger agents who have woken up to what this means are very unhappy because they don’t want to be principal.

“If Monarch was filling a lot of seats through these online agents it may have to push for more direct bookings. But because there’s no obvious alternative, agents may have to increase their Atol licence.”

In a statement Monarch said: “We are not requiring OTAs to become principals as standard.”