The Civil Aviation Authority is expected to announce on Tuesday that it will push back the Atol renewal deadline by 28 days.
An industry source said the move would give the industry some “breathing space” but could also “prolong the agony” for some.
The source said: “It’s difficult to know if this is good or bad news. It gives us all another six weeks to get our heads around what is happening currently [with the coronavirus]. If it doesn’t gather pace in the way that the government thinks it will, then we could be in a better position in a month, although I think that’s now unlikely.
“But it also means companies are being given an extra six weeks’ use of their Atol licence when consumers just aren’t booking holidays, so in many ways, it just delays the inevitable,” the source said.
The CAA was unable to confirm the extension.
The Atol extension was extended for the first time in October as the fallout from the collapse of Thomas Cook left the CAA dealing with the largest repatriation of British citizens since the Second World War.