Monarch Airlines confirmed this morning it has gone into administration and cancelled upcoming flights and holidays hitting around 750,000 customers.
The Civil Aviation Authority and the Department for Transport are now working on getting all passengers currently abroad back home and have set up a website to arrange refunds for those with future journeys booked.
But when an airline goes bust customers aren't always able to get an automatic refund and may need to rely on their travel insurance or card provider in order to get their cash back.
If the trip you have booked has protection under the Air Travel Organiser's Licence, you should be able to get an automatic refund.
We explain what qualifies for ATOL protection in our Q&A below.
If not you will need to look at claiming from either your credit or debit provider or through your travel insurance.
But when it comes to travel insurance, hundreds of policies do not automatically offer protection for airline failure, data from Defaqto has shown.
Of all the 962 annual travel insurance policies currently available, 392 do not provide any cover for airline failure, 94 offer it as an add on and 476 provide it as standard.The figures are very similar for single trip policies.
Brian Brown, head of insight at Defaqto, comments: 'Airline failure is not covered as standard on two-fifths of travel insurance policies as the risk is usually relatively small.
'Anyone who has booked a package holiday with Monarch, will be fully protected through the ATOL scheme and should not lose out. However, those who have booked flights directly and haven't travelled yet, are at risk.
'If you paid for your flight with a credit card, you will be able to get a refund from the credit card company and should contact them directly for this.
'If you bought your flight with a debit card, you may be able to claim under your travel insurance policy if you have this cover.'
Here we've taken a look at the big consumer questions being asked around the Monarch failure and consumer protection in general.
If you have further questions you need answers to, please leave them in the comment box below.
Q. I'm away on holiday, can I carry on my holiday and how will I fly home?
A. If you're due to come back on or before the 15 October, you can continue your holiday as normal and will be notified about your new flight number 48 hours before you travel, at no extra cost to you.
This applies if you have a package holiday booked or you just booked a flight through Monarch (or a third-party company).
Do not travel to the airport until your new flight number has been listed on the special CAA website, or the lead passenger on the booking has been told to do so via text or email.
For those with a return home date after 16 October, if you have ATOL cover you'll get a new flight at no cost to you, but if you aren't covered by ATOL, usually those with just a flight booked, you'll need to book and pay for your own flight home.
You can then try and claim the money back for this through your credit or debit card provider or travel insurer.
Q. Can I get a refund for future bookings I've made?
A. Yes and no. If it's a package holiday you can as it has ATOL protection, no matter where you booked it.
If it's just a flight you've booked you won't be covered under ATOL if it was booked on or after 14 December 2016.
If it was booked before this date you may be covered under ATOL so double check your travel documents.
Q. What is ATOL and how can it help me?
A. For package holidays, which include a flight and a hotel booking, bought through a UK company, by law the holiday should have ATOL protection.
The scheme is run by the run by the CAA and is funded by travel companies that pay 2.50 to the scheme for every person who books a holiday through them.
All holidays where a flight and accommodation have been booked together through a UK travel company are covered.
It also covers any trip booked with a single UK company which includes the following; flights and accommodation, flights and hire care, or all three of these elements.
For travellers who book flights through a third-party company and don't receive the tickets straight away, such as for charter flights or discounted scheduled flights, and not via the airline, the cover is also in place.
To check the holiday you're booking will be covered look for the ATOL logo or ask the company if they're covered before you book.
Q. Can I get a refund through Section 75?
A. If you paid on credit card for the holiday or flight and the value was between 100 and 30,000 you may be able to get a refund through your credit card provider.
This falls under Section 75 of the Consumer Credit Act and means the card provider is equally liable and therefore you may be able to claim a refund from it.
Contact your card provide to find out if you are eligible.
Q. Can I get a refund through my bank?
A. If you didn't pay on credit card, or the booking was under 100, you may be able to get a refund through your card provider's 'chargeback' scheme.
It'srun by certain providers including Visa, Mastercard and Amex so if you card is with one of these it's worth contacting the card issuer to find out if you are eligible.
Q. I paid with Paypal - can I get a refund?
A. If you paid for your flight via Paypal you may be able to get a refund via its Buyer Protection scheme. Contact Paypal for information on how to apply.
A Paypal spokesperson said: 'Paypals buyer protection programme covers flights that have been cancelled as a result of an airline going out of business. Customers should check whether their flights are covered by the travel industrys ATOL scheme. If not, they will be able to file a claim under our buyer protection policy.
'Customers typically have 180 days from the date of the payment to do this, although given the exceptional circumstances in the case of Monarch Airlines PayPal will make goodwill refunds to customers who bought tickets over 180 days ago.
'PayPal customers who used PayPal Credit to buy their flights also have the option of filing a claim for a refund under s75 of the Consumer Credit Act.
Q. Will my travel insurance cover me?
A. Many people often mistakenly believe their travel insurance will cover them if a holiday company goes bust.
But travel insurers don't generally automatically include a company financially failing in their policies.
Even so if you have travel insurance it's worth checking to see if you have cover or not.
The terms and conditions will state if airline failure is covered.
Before you contact the insurer, make sure you've spoken to the travel agent or provider you booked through as it will have expected you you to try these avenues first.
Dr Matthew Connell, director of policy and public relations at the Chartered Insurance Institute, comments: 'If you had a holiday booked with Monarch and it was booked as a package, i.e. flight and hotel, then you will be covered under the ATOL protection scheme.'
Q. Will I get refund if I only booked a flight?
Mr Connell adds: 'If you booked your flight independently, the situation is more complicated.
'If you paid with a credit card, you may be able to get a refund from your credit card company.
'Some travel insurance policies cover scheduled airline failure and it is worth checking your policy to see if you can claim.
'If you lose out on any other expenses due to the flight being cancelled, such as the cost of your accommodation, transfers or excursions, the same will apply.
'Some travel insurance policies on the market will also cover this and so it is worth checking with them what you can claim.'