Monarch denies it is on brink of going bust - but what happens if it does

There is growing concern from holidaymakers as rumours that Monarch Airlines is on the verge of collapse circle.

The company has denied speculation that it is in financial trouble, saying that it is "trading well", after its Twitter feed became inundated with queries from customers asking if the airline was going bust.

The budget carrier has reassured customers by saying it is on the brink of announcing significant new investment that would lead to securing a new licence.

However, one fact that is fueling the concern is that Monarch reportedly needs to renew its operating licence by Friday to avoid closing.

So what would actually happen if it went bust?

• What happens to passengers abroad?

Monarch is covered by the Civil Aviation Authority's Atol scheme, meaning customers can be assured they can finish their holiday before returning home.

However, you must have received an Atol certificate from the airline listing all parts of your journey on it, to be covered.

• What if you have a holiday booked already?

Again, if you are Atol protected, which you are if you have the certificate from listing your journey, then the scheme will provide you with a full refund.

• What happens if I choose to cancel my holiday now?

Monarch is insisting it is not under the threat of closing and is financially stable, meaning it will be able to renew its licence.

If you decide to cancel your flights now you are at risk of losing some or all of your money.

• What has Monarch said?

A Monarch spokesman for the airline said: "Over the weekend, there has been negative speculation about Monarch's financial health.

"Our flights are operating as normal, carrying Monarch passengers as scheduled.

"To weather tougher market conditions and to fund its ongoing growth, Monarch expects to announce a significant investment from its stakeholders in the coming days."