Leeds based airline Jet2 will cancel all holidays and flights up to and including 23 June 2021 due to uncertainty over the government's travel plans.
A framework for the restart of overseas travel was set out on Thursday evening, but government officials refused to say if foreign holidays will be able to go ahead from May 17, as set out in the lockdown roadmap.
There was also no suggestion as to which destinations Britons could visit without self-isolating, when holidays do eventually resume.
Jet2 chief executive Steve Heapy said his firm had studied the Global Travel Taskforce's framework and is "extremely disappointed at the lack of clarity and detail".
He said the framework had barely changed in six months and it was still uncertain when flights can definitely restart.
He added: "Following the publication of the framework today, we still do not know when we can start to fly, where we can fly to and the availability and cost of testing. Rather than answering questions, the framework leaves everyone asking more."
"Because of the continued uncertainty that the framework provides, it is with a heavy heart that we have taken the decision to extend the suspension of flights and holidays up to and including 23rd June 2021."
The company has said that where customers yet to travel are affected by any programme changes, they will automatically cancel their booking with a full refund. They will then be in touch to help rebook later in the year.
Transport Secretary Grant Shapps confirmed plans would include a traffic light system to determine if and how long people will need to isolate for upon arrival back into the UK.
But he was unable to say which countries will be placed into the "green zone", which would exempt travellers from mandatory quarantine upon arrival back in the UK - nor when international travel could resume.
All arrivals into Britain, when overseas travel restarts, will have to take pre-departure and post-arrival coronavirus tests, the Department for Transport announced.
Mr Shapps admitted to ITV's Good Morning Britain that the more-than £100 cost per person for the necessary tests is "too high".
Asked which countries might be in designated 'green', the transport secretary said "at the moment we don't know and the reason for that is with coronavirus things move very quickly".
He said at "the beginning of May" the Joint Bio-security Centre will make recommendations for which category a country should be in "so we'll be able to give people a bit more notice".
Mr Shapps added that the government is working to make coronavirus tests cheaper, with polymerase chain reaction (PCR) tests - the type needed to travel - costing around £120.
Asked if people could start to book foreign holidays now, he told Sky News: “I’m not telling people that they shouldn’t book summer holidays now, it’s the first time that I’ve been able to say that for many months.
“But I think everybody doing it understands there are risks with coronavirus and of course actually, I think people would want to be clear about which countries are going to be in the different traffic light system.
“So there is only two or three weeks to wait before we publish that list itself. But yes, tentative progress, for the first time, people can start to think about visiting loved ones abroad, or perhaps a summer holiday.
“But we’re doing it very, very cautiously, because we don’t want to see any return of coronavirus in this country.”
However, travel firms have slammed the plans to force holidaymakers returning from low-risk destinations to take an “expensive and unnecessary” type of coronavirus test.
Shapps said he was “concerned” about the high cost of the polymerase chain reaction (PCR) type of test and said he would be working with private providers “to see that cost driven down”.
“The PCR test is often called the gold standard test, it’s the one which will be able to be processed further to look at things like variants of concern,” he told BBC Breakfast.
“I’m concerned about the cost of these. They are provided by private providers and we would like to see that cost driven down.
The announcement came three days after Boris Johnson pledged to make testing requirements “as affordable as possible”.
While more detail was set out, the DfT refused to say which countries Brits may be able to travel to, saying: “It is too early to predict which countries will be on which list over the summer, and the government continues to consider a range of factors to inform the restrictions placed on them.
“We will set out by early May which countries will fall into which category, as well as confirming whether international travel can resume from 17 May.”
Under the traffic light system, assessments will be based on a range of factors, including the proportion of a country’s population which has been vaccinated, rates of infection, emerging new variants and the country’s access to reliable scientific data and genomic sequencing.
These are the rules for each category:
Green: There is no need to self-isolate. Take a pre-departure test and a PCR test on day two of your arrival in the UK.
Amber: Self-isolate for 10 days, unless you receive a negative result from a test taken at least five days after arrival. Take a pre-departure test, and PCR tests on day two and day eight of your arrival in the UK.
Red: Spend 11 days in a quarantine hotel. Take a pre-departure test, and PCR tests on day two and day eight of your arrival in the UK.
The categorisation of countries will be “kept under review” with a “particular focus on variants of concern”, the Department for Transport said.
Restrictions will be “formally reviewed” on June 28 to take account of “the domestic and international health picture and to see whether current measures could be rolled back”, the department added.
Further reviews will take place no later than July 31 and October 1.
A “Green Watchlist” will be introduced to identify countries most at risk of moving from “green” to “amber”.
Paul Charles, chief executive of travel consultancy The PC Agency, said the government is “making the right moves to help the sector restart successfully in May” but there are “still too many layers of complexity”.
The government announced plans to digitise the Passenger Locator Form to enable checks to take place at e-gates by autumn 2021.
It also revealed the Civil Aviation Authority will be given additional enforcement powers to act on airlines that breach consumer rights, after many passengers struggled to obtain refunds when flights were grounded.