Travel firm Monarch has gone into administration, cancelling the flights and holidays of 860,000 people.
Some 110,000 customers overseas are being flown home in what the Government is calling the UK’s biggest peacetime repatriation.
A further three quarters of a million people held future bookings with the travel firm.
Monarch’s board called in administrators KPMG in the early hours of Monday morning.
Administrator Blair Nimmo said the company, which employs around 2,100 people across its airline and tour group, had struggled with mounting costs and competitive market conditions that saw it suffer a period of sustained losses.
Passengers already abroad are being flown home at no extra cost.
Many are in popular holiday resorts in Spain and Portugal such as the Costa del Sol, the Algarve and the Canary Islands.
The Government has warned passengers to expect disruption and delays as it works to ensure there are enough flights to return the “huge number” of passengers.
Those who have not yet departed will receive a full refund if their booking was protected by the Air Travel Organiser’s Licence.
A notice for Monarch Airlines passengers is seen at London’s Gatwick Airport (Simon Stirrat/AP)
If it was not, they may be able to seek compensation through their travel insurance or credit card company.
Many passengers turned up at airports on Monday morning ready to go on holiday only to find their flights were cancelled.
Some couples have had their wedding plans thrown into chaos as they struggle to find flights with other airlines for them and their guests.
CAA chief executive Andrew Haines said the regulator was notified by Monarch four and a half weeks ago that “there were issues they were dealing with”.
He went on: “Unfortunately we didn’t get final confirmation until 4am this morning and my understanding is that the board resolution to go into administration didn’t take place until close to midnight on Saturday night.”
Monarch was still advertising flights on its website on Sunday, meaning some passengers may have booked trips even after the company’s bosses decided it would stop trading.
Repatriation flights will match Monarch’s original schedule “as close as possible” although there will be some changes, Mr Haines said.
“There will undoubtedly be some disruption but we have been able to secure 34 aircraft from 16 different airlines to run a programme,” he told reporters.
“Today we have published the flight schedule and we expect to be able to get everybody back today that was due to return today. We certainly expect to do that for the next few days.”
EasyJet and Qatar Airways are among the airlines providing aircraft.
Mr Haines said “the nature of administration” means Monarch’s fleet is not immediately available for use.
Administrators are now considering breaking up the company as no buyer has been found to purchase Monarch in its entirety.
Transport Secretary Chris Grayling (Stefan Rousseau/PA)
Monarch, whose headquarters are at London Luton Airport, was founded in 1968.
In the last year the airline had taken 14% more customers but revenue was £100 million less, while adverse movement of the pound against the dollar had increased costs including fuel, handling charges and lease payments.
In a letter to staff, Monarch chief executive Andrew Swaffield said the “root cause” of the airline’s plunging revenues was terror attacks in Egypt and Tunisia, as well as the “decimation” of the tourist trade in Turkey.
But the Unite union, which represents around 1,800 engineers and cabin crew working for Monarch, claimed that ministers rebuffed requests by the company to provide a bridging loan, charged at commercial rates, to tide it over while it restructured the business to focus on its long-haul operations.
National officer Oliver Richardson accused the Government of being “content to sit on its hands and allow one of the UK’s oldest airlines go into administration”.
He added: “Continuing uncertainty surrounding Brexit and the ability of UK airlines to fly freely in Europe after the UK has left the EU undoubtedly hindered Monarch getting the investment it needed to restructure and survive.”