The Association of British Travel Agents (ABTA) is advising its members to offer cover for the collapse of an airline along with holiday packages.

This week, Belgium's debt-ridden national airline cancelled most of its flights after ground staff staged a walk-out in protest over rumours of bankruptcy.

ABTA said thousands of travellers would be left out of pocket because travel insurance policies did not cover airline collapse and airlines are under no obligation to have their own insurance.

An ABTA spokesman said: "The major issue with scheduled airlines is that they don't have to have bonds to protect their customers against them going out of business."

He added that, despite ABTA's repeated lobbying on the matter, airlines had been able to get off "scot free".