The government is planning a major expansion in the protection offered to travelers when companies go bankrupt.
At the moment, a scheme known as Air Travel Organiser's Licensing (ATOL) covers travellers who book package holidays: that is, the accommodation and flight are bought from the same operator. If such companies go bankrupt, the scheme pays a full refund to people yet to travel, and covers the cost of a flight home to those already abroad. The scheme is funded by a £2.50 levy on every customer.
The new scheme would extend the coverage to what are known as "flight plus" holidays. These are where the operator, often an online firm, sells the accommodation but technically acts as an agent buying the flight on behalf of the customer. At the moment this does not count as a package holiday and thus isn't protected.
Customers who book flights and accommodation separately will still not be covered. And the changes don't make travel accommodation redundant: medical coverage abroad is still vital.