Monarch, the UK’s fifth largest airline, has been granted a 24-hour extension to its licence to sell package holidays.
The low-cost carrier had previously had a deadline of midnight on September 30 before its Air Travel Organiser’s Licence (Atol) expired.
The extension allows the firm to continue to sell Atol-protected holidays up until midnight on October 1.
That means that holidaymakers can still purchase Atol-protected trips from Monarch on Sunday covering them from whenever their trip takes place.
But analysts said it may only prove a stay of execution for the firm, which has twice received a temporary extension in the last two years following questions over its finances.
UK travel firms selling holidays and flights are required to hold an Atol, which protects customers with pre-booked holidays from being stranded abroad in the event of circumstances such as the company ceasing to trade.
The Civil Aviation Authority (CAA) said: “We can confirm that Atol protection will remain available for eligible holiday bookings made with Monarch on Sunday.”
Monarch, whose headquarters are at London Luton Airport, was founded in 1968.
It also operates from London Gatwick, Manchester, Birmingham and Leeds Bradford to more than 40 destinations around Europe and further afield.