More than half a million people are due refunds following the collapse of Thomas Cook, but payouts could take at least two months to complete.
The Civil Aviation Authority (CAA), which operates the ATOL protection scheme, announced that its priority at this point is to help stranded Brits return home.
Once this is complete, it plans to launch the claims process.
But the Thomas Cook collapse will likely lead to one of the biggest refund payouts in history for the CAA - adding to wait times for people eager to rebook their cancelled holidays.
The CAA hopes to have the claims process in place by September 30 - which is when customers will be able to launch a request for a refund.
The service will then attempt to process all refunds within 60 days of full information being received.
This means, in total, it could take up to 67 days for refunds to be issued, subject to how many claims it receives and when the website goes live.
The collapse of Monarch two years ago placed the CAA in a similar position, though on a much smaller scale.
The authority processed 32,000 compensation requests worth more than £21 million, Simon Calder of the BBC Travel Show said.
Within three months, the CAA had refunded 80 percent of these.
And when XL Leisure Group went under in 2008, there were 200,000 forward bookings to process - taking the CAA up to one year to complete.
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