EasyJet Holidays says it's now offering full refunds to those who cancel their trip up to four weeks before departure.
The company is hoping to entice customers with a new flexible package that allows passengers to amend their holiday for free up to 28 days before they travel.
It also means if the holidaymaker changes their mind, they'll get a cash refund, and, if they find the same deal cheaper elsewhere, they'll refund the difference.
The balance will be returned in full, however the deposit will be returned as a credit voucher.
The new policy, which launches this week and applies to future and existing bookings, also allows customers to pay nothing towards their holiday except a £60 per person deposit up until four weeks before departure.
The package holiday company said the protection promise will be ongoing, and that it has no plans to withdraw it once the coronavirus pandemic eases.
It means customers won't need to pay anything other than their £60 holding deposit until a month before departure, and those who have paid or later change their mind will be able to request a full cash refund, although their deposit will be returned as a 12-month voucher.
Travellers will also be able to change their dates and destination in the run up to their booking without any admin charges.
And, if you find the same holiday elsewhere, Easyjet Holidays will match the price.
The protection promise applies to all future bookings, but also to current bookings as well.
However, bear in mind that if an airline or retailer goes bust, credit vouchers may no longer be valid.
The EasyJet airline - which operates separately to EasyJet Holidays - has been described by a union official as in a "really, really dire situation."
In a recording obtained by BBC News, Martin Entwisle, a BALPA union representative, claimed the airline is "hanging by a thread".
Entwisle, who made the comment a fortnight ago after a meeting with the airline's chief financial officer, Andrew Findlay, said its survival is reliant on a strong summer 2021.
"I think the easiest way to put it is that the company is hanging by a thread," he told pilots.
"If we don't have a good summer next summer and make a considerable amount of money, we really are going to be out of a job."
An easyJet spokeswoman said: "The recording does not reflect what easyJet or its CFO said. We have been clear the whole industry has been impacted by the pandemic, however easyJet has taken a prudent approach to capacity and the right actions on cash preservation. The airline continues to keep all liquidity options under review, but no decisions have been taken.
"Winter flying is always significantly lower than summer and easyJet will continue with its prudent and dynamic approach to capacity over the winter. No decisions have been taken and we will update the market in due course.
"As we said at our recent trading update, changing restrictions and quarantine requirements continue to impact consumer confidence to book travel so we continue to call on the UK Government for sector specific support."
