The Civil Aviation Authority has lost its appeal against the not-guilty ruling in the Travel Republic case.
Lord Justice Elias said it is now up to the Supreme Court as to whether or not to hear a further appeal.
The CAA took legal action against Travel Republic last year over an alleged breach of Atol regulations.
A judge at Westminster Magistrates’ Court dismissed the charges in November. He said the prosecution had failed to prove that Travel Republic did anything other than “sell components of holidays separately, but at the same time”.
When the appeal began on May 7, legal counsel for the CAA Ian Croxford QC argued that it was “curious and inappropriate” for the judge in the magistrates’ court to base his decision on the fact that the prosecution had failed to prove that Travel Republic was selling package holidays.
Earlier this year, the CAA decided not to pursue its appeal against the acquittal of Travel Republic managing director Kane Pirie.