The industry won praise from the Civil Aviation Authority for its help in rescuing holidaymakers when XL Leisure collapsed last Friday.

But calls for an extension of the ATOL consumer-protection system will fall on deaf ears in government. A senior source told Travel Weekly: “This is not a political priority.”

The Scottish Passenger Agents’ Association demanded expansion of the £1 ATOL ‘levy’ to all travel arrangements and Association of Independent Tour Operators chairman Derek Moore said: “XL’s collapse gives the lie to the belief major carriers will not go bust.”

Federation of Tour Operators director-general Andy Cooper expressed hope the government would reverse its previous rejection of the demands, saying: “The loss of people’s holidays and pictures of people stranded abroad are the sort of thing that gets through to government.”

CAA consumer protection group director Richard Jackson said the rescue relied on the secondment of industry staff and lessons would be drawn once the dust has settled. Consumer protection group deputy director David Moesli said: “The support we have had from the trade has been fantastic.”

However, a Department for Transport spokesman dismissed demands to extend ATOL protection, saying: “Charging passengers an additional fee will put up the prices of everyone to protect the minority affected by an airline failure, some of whom have protection from a credit-card payment.”

Immediate action is in any case unlikely as the government is beset with infighting and preoccupied with the global financial meltdown.

Co-operative Travel Group managing director Mike Greenacre promised “a major campaign” to emphasise the benefits of ATOL protection.

Two-thirds of the 85,000 XL holidaymakers abroad were back in the UK by the end of this week and the CAA was beginning to process refunds for advance bookings.

Most major carriers supplied aircraft to the rescue effort, with Monarch Airlines handling the contractual issues, while TUI Travel UK, Thomas Cook and Virgin Holidays organised ground handling with members of their crisis management teams in the CAA operations room.

The rescue was complicated by the failure of Spanish charter carrier Futura four days earlier with the loss of 19 aircraft and by the fact XL Airways’ fleet was grounded in the absence of financial guarantees to airports.

The CAA dealt with 200,000 calls alone last Friday.

More on the collapse of XL