The government ought to control a central fund to provide financial assistance to holidaymakers whose airlines go out of business, it has been claimed.

Sean Tipton, spokesperson for the Association of British Travel Agents, said each time someone books a holiday a small sum could be paid into the fund to ensure they received their money back if a company goes out of business.

Tour operators currently provide financial protection, but airlines are not required to do so at present, Mr Tipton explained.

"Whether the government will look at this again, we will see but it shouldn't be something where there are a number of airlines going out of business before action is taken, you take action before they go out of business not after," he remarked.

Last week Zoom airlines suspended its flights and applied to go into administration, leaving many passengers stranded and having to claim the money back from their credit card providers, travel insurance customers may be interested to learn.