zbobserver, I'm not aware of any such extra restriction on the ATOL and indeed if that were the case one would expect all flights to be ATOL protected, which I don't believe is the case for flight only inbound to UK flights for example.
If you buy an airline these days you look at its EBITDAR. If it's OK then you may make money, but only if the balance sheet has sufficient cash to ride several 10s of £m either side of what your business plan forecasts (100s of £m for national carrier size airlines). Changes in fuel price, exchange rates and market conditions can easily mean you have a rough ride.
As an investor you need deep pockets and faith in the company if you are going to reap the rewards over the longer term. The 737 MAX 8 deal with Boeing should further improve Monarch's finances very significantly, but of course it has to get to the point where the maintentenance and fuel saving costs feed through to build the balance sheet, and in the mean time finance will have to be raised.
You cannot buy an airline and not put in a sufficient cash buffer and expect to ride out even normal cyclical changes, let alone those seen recently. Easy and FR for example ride out such cycles all the time, but nobody notices as their cash reserves are more than adequate for the nature of the business in hand.
As with any business, ultimately cash is king.