Thomas Cook has collapsed after last-minute negotiations aimed at saving the 178-year-old holiday firm failed.
The UK Civil Aviation Authority (CAA) said the tour operator had “ceased trading with immediate effect”.
It has also triggered the biggest ever peacetime repatriation, aimed at bringing more than 150,000 British holidaymakers home.
Peter Fankhauser, Thomas Cook’s chief executive, said the firm’s collapse was a “matter of profound regret”.
Commenting as the company entered compulsory liquidation, Mr Fankhauser also apologised to the firm’s “millions of customers, and thousands of employees”.
The tour operator’s failure puts 22,000 jobs at risk worldwide, including 9,000 in the UK.
Mr Fankhauser said: “Despite huge efforts over a number of months and further intense negotiations in recent days we have not been able to secure a deal to save our business.”
He added: “It has been my privilege to lead Thomas Cook. It is deeply distressing to me that it has not been possible to save one of the most-loved brands in travel.”
Prime Minister Boris Johnson pledged to help stranded holidaymakers, but also questioned whether company directors were properly incentivised to “sort such matters out”.
He said: “It’s a very difficult situation and obviously our thoughts are very much with the customers with Thomas Cook, the holiday makers, who may now face difficulties getting home.”
Transport Secretary Grant Shapps said the company’s collapse was “very sad news for staff and holidaymakers” and urged those affected to be “understanding with staff”.
Mr Shapps has announced that the government and CAA has hired dozens of charter planes to fly customers home free of charge.
The emergency operation, codenamed Operation Matterhorn, is aiming to bring home Britons currently on holiday with the firm.
On Sunday, empty aircraft had already started to be flown overseas, ready to bring British tourists back to the UK on Monday.
One of the world’s best known holiday brands, the business was founded in 1841 in Leicestershire by cabinet-maker Thomas Cook.
How will holidaymakers get home?
All customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home “as close as possible” to their booked return date, the Department for Transport (DfT) has said.
Customers will be on special free flights or booked onto another scheduled airline at no extra cost.
Flights will start operating from Monday, with details of each flight to be posted on a dedicated website as soon as they are available.
The DfT added that a “small number” of passengers may need to book their own flight home and reclaim the costs.
Customers have been urged not to cut short their holiday or go to the airport without checking the website for more information about their return journey.
The CAA is also contacting hotels accommodating Thomas Cook customers, who have booked as part of a package, to tell them that the cost of their accommodation will be covered by the government, through the Air Travel Trust Fund and Air Travel Organiser’s Licence scheme (Atol).
The CAA said in a statement: “All Thomas Cook bookings, including flights and holidays, have now been cancelled.
“We know that a company with such long-standing history ceasing trading will be very distressing for its customers and employees and our thoughts are with everyone affected by this news.”
Tim Johnson, policy director of the CAA, told BBC News it has chartered “more than 40” aircraft, which are already in position, to bring passengers home.
He urged customers in the UK who were due to travel not to go to the airport “because very sadly your flight has been cancelled”.
Mr Johnson added: “For those who have not yet started their holiday, we will be publishing details of how they can claim a refund on the website, no later than next Monday.”
Business Secretary Andrea Leadsom has said she will write to the Insolvency Service urging them to “fast-track” their investigation into the circumstances surrounding Thomas Cook going into liquidation.
The DfT said the investigation will also consider the conduct of the directors.
Speaking to BBC News from Manchester airport, travel expert Simon Calder said Thomas Cook “wasn’t ready for the 21st Century”.
He said: “It was using a model that was great for the second half of the 20th Century where people would obediently go into their local travel agency and book a package holiday.
“Now everybody can pretend they are a travel agent. They’ve got access to all the airline seats, hotel beds, car rentals in the world and they can put things together themselves.
“Thomas Cook simply wasn’t differentiating enough.”
Mr Calder, travel editor at The Independent, added that planes at the airport began to be impounded shortly after 00:00 BST.
While an estimated 150,000 Britons are affected by Thomas Cook’s collapse, the company has around 600,000 customers abroad.
In Germany, one of Thomas Cook’s main markets, insurance companies will help organise the response to its collapse.
What went wrong?
Thomas Cook had secured a £900m rescue deal led by its largest shareholder Chinese firm Fosun in August, but a recent demand from its lending banks to raise a further £200m in contingency funding had put the deal in doubt.
Fosun said in a statement it was “disappointed” following news of the collapse.
It added: “Fosun confirms that its position remained unchanged throughout the process, but unfortunately other factors have changed.
“We extend our deepest sympathy to all those affected by this outcome.”
The holiday company had spent all of Sunday in talks with lenders trying to secure the additional funding and salvage the deal, but to no avail.
It had also asked the government for financial aid, a solution also urged by Labour and union groups.
But on Sunday Foreign Secretary Dominic Raab told the BBC the government did not “systematically step in” when businesses went under unless there was “a good strategic national interest”.
Customers on a package holiday have Atol protection – a fund paid for through industry levies – which will cover the cost of their holiday and repatriation.
Thomas Cook has blamed a series of issues for its problems including political unrest in holiday destinations such as Turkey, last summer’s prolonged heatwave and customers delaying booking holidays because of Brexit.
But the firm has also faced fierce competition from online travel agents and low-cost airlines.
In addition, many holidaymakers are putting together their own holidays and not using travel agents.
What are your rights?
If you are on a package holiday you are covered by the Atol scheme.
The scheme will pay for your accommodation abroad, although you may have to move to a different hotel or apartment.
Atol will also pay to have you brought home if the airline is no longer operating.
If you have holiday booked in the future you will also be refunded by the scheme.
If you have booked a flight-only deal you will need to apply to your travel insurance company or credit card and debit card provider to seek a refund.
When Monarch Airlines collapsed in 2017, the government organised to bring home all the stranded passengers, whether they were covered by Atol or not.
Source: BBC
