Monarch Airlines has ceased trading and all of its future bookings have been cancelled, the Civil Aviation Authority has said.
About 110,000 customers are currently overseas and the government has asked the CAA to charter more than 30 aircraft to bring them back to the UK.
Monarch is the UK’s fifth biggest airline and the country’s largest ever to go into administration.
Customers due to fly from the UK have been told not to go to the airport.
Monarch had been in last-ditch talks with the CAA about renewing its licence to sell package holidays.
It had until midnight on Sunday to reach a deal with the aviation authority but failed to do so.
The airline carried 6.3 million passengers last year to 40 destinations from Gatwick, Luton, Birmingham, Leeds-Bradford and Manchester airports.
Monarch, founded in 1968, employs about 2,500 people and is made up of a scheduled airline, tour operator and an engineering division.
Transport Secretary Chris Grayling said: “This is a hugely distressing situation for British holidaymakers abroad – and my first priority is to help them get back to the UK.
“That is why I have immediately ordered the country’s biggest ever peacetime repatriation to fly about 110,000 passengers who could otherwise have been left stranded abroad.”
The government has warned passengers to expect disruption and delay as it works to ensure there are enough flights to return the “huge number” of passengers.
The CAA says planes are already on their way to some European airports to bring home people due to fly back on Monday. The “vast majority” of them will return by the end of the day.
Andrew Haines, chief executive of the CAA, said the “scale” of the operation means “some disruption is inevitable”.
He added: “We ask customers to bear with us as we work around the clock to bring everyone home.”
For people who booked package holidays – but have not yet flown – they will be able to apply for a refund through the Atol scheme, which refunds customers if a travel firm collapses.
“Experience suggests this will take weeks or months rather than days,” says Simon Calder, travel editor at the Independent.
By law, every UK travel company which sells air holidays has to hold an Atol licence. Monarch’s website says it only held the licence for package holidays, not flight-only tickets.
Monarch’s owner, Greybull Capital, had been trying to sell part or all of its short-haul operation so it could focus on more profitable long-haul routes.
The airline reported a loss of £291m for the year to October 2016, compared with a profit of £27m for the previous 12 months, after revenues slumped. -BBC
