Monarch carries around 20,000 passengers a day, to and from five UK airports /

The carrier says it is “close to announcing the largest investment in its 48-year history”

After a week of uncertainty for staff and passengers, Monarch has been given another 12 days to get its house in order — and demonstrate it has deep enough pockets to survive a difficult winter.

Monarch carries around 20,000 passengers a day, to and from five UK airports. With barely three hours before its Air Travel Organiser’s Licence (ATOL) expired — and with it the right to sell package holidays — the airline was granted an extension until 12 October by the Civil Aviation Authority (CAA).

It followed what Monarch called “significant further investment from shareholders”, with the prospect of more cash coming in from a Chinese transport conglomerate HNA.

Until the announcement, the airline’s 2,800 staff, and an estimated half-million passengers with forward bookings, were unsure that Monarch would be flying. 

With a few hours remaining, a passenger named Sue Wild tweeted: “@Monarch do I start packing or crying?”

In his first statement since the crisis became public last weekend, Monarch’s chief executive, Andrew Swaffield, said: “I am delighted that we have been able to come to an agreement with the CAA on the extension of Monarch’s ATOL licence and am excited about the additional capital coming into the group which will help us fund our future growth.

The authority said: “Monarch now has 12 days to satisfy the CAA that the group is able to meet the requirements for a full ATOL licence.”

To grant a licence, the CAA must be satisfied with a firm’s assets, its profitability and its prospects in what is acknowledged by all airlines to be a difficult market.

Autumn is often a tough season for airlines, with revenue failing to cover costs. In the summer Mr Swaffield said that funding £35m would be needed to see Monarch through the winter. 

The owner, Greybull Capital, is known to have been seeking a buyer for the airline, without success. It is a very difficult time to sell an airline. The short-haul market from the UK, which is now Monarch’s sole business, has excess capacity. In addition, the airline has an order for 30 new Boeing 737 jets, costing £2bn, with deliveries set to start in 2018.

Despite speculation about its financial viability - which Monarch has denied - the airline has continued to fly a normal schedule. Mr Swaffield said: “I am immensely proud of the professionalism of the Monarch team.”

Last weekend the CAA was evidently so worried about Monarch’s prospects that it set up a “shadow airline” to mimic the Monarch schedule, with chartered planes deployed across Europe in case the carrier shut down and British holidaymakers needed to be repatriated.

The jets were not required and are now believed to have returned to their bases. It is not clear who will bear the costs for the operation, believed to total at least £2m.