Consumer champion Which? has accused airlines of misleading customers about the protection they are entitled to under the Atol scheme.
Airlines, including British Airways, were found by researchers to have told customers that they would be covered by Atol if they bought a flight only.
The Atol scheme only covers customers if they buy a package including a flight and entitles them to be repatriated and to get their money back should the airline fail.
Many airlines’ holiday brands, like British Airways Holidays, do offer full Atol protection.
The Atol scheme is backed by the Air Travel Trust Fund that is currently £145 million in the black funded by £2.50 per person from every Atol sale.
However focus on Atol has increased following the collapse of Monarch Airlines last week, the UK’s fifth biggest airline.
Only 20% of its 860,000 customers who had bought flights before it failed will be covered by Atol.
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Monarch failure: Trade scrambles to rebook clients affected by collapse