Monarch, the UK’s fifth largest airline, was today granted a one day extension to its licence after emergency talks with regulators.

Monarch’s ATOL licence is due to expire, but its bosses were trying to convince the Civil Aviation Authority (CAA) to grant it a renewal.

With the airline’s future in doubt, the CAA said it would provide a “daily update” on the status of its ability to operate its package holiday arm.

This temporary arrangement comes amid concerns that the airline’s losses were spiralling out of control.

If left without its CAA granted licence the company could have to call in administrators for its package holiday arm, and leaveup to 100,000 holidaymakers uncertain about their homeward travel across the EU and Turkey.

A source close to the airline also told The Daily Telegraph the CAA had raised concerns over the company’s substantial recent losses. These potentially fatal conditions for the company have come amid “bloodbath” trading for short-haul airlines, the source said, as terrorism attacks and security concerns in traditionally strong sales areas such as Tunisia and Turkey have hit consumer demand.