Thomas Cook, the world's oldest travel firm, has collapsed. The UK Civil Aviation Authority announced that the tour operator had "ceased trading with immediate effect", stranding hundreds of thousands of travellers around the globe as well as putting 22,000 jobs at risk. 

The 178-year-old firm runs hotels, resorts, airlines and cruises for 19 million people a year in 16 countries. It currently has hundreds of thousands of customers abroad, forcing governments and insurance companies to coordinate a huge rescue operation.

What happens next?

The company has entered compulsory liquidation, with the Official Receiver appointed to close the business and recoup whatever debts are possible by redistributing its assets to claimants. Its aeroplanes are already being impounded. 

The more immediate problem is how to return stranded holidaymakers: All the company's flights have been cancelled - Spanish airports operator Aena says 46 flights from Spain have been scrapped - and it is estimated that the firm has 600,000 customers abroad.

Of these, around 150,000 are Britons, and to help get them home the UK Government has chartered 45 jets - temporarily making it the UK's fifth-largest airline - which will fly 64 routes today in a scheme codenamed Operation Matterhorn. It is believed to be the UK's largest ever peacetime repatriation programme.

Germany is another of Thomas Cook's key markets, with the company listed on the Frankfurt stock exchange. In a statement released on Monday, German airline Condor (which is owned by Thomas Cook) said its flights are still operating for now. The company also said it's asked the German government for a bridging loan to allow it to continue flying.

Thomas Cook says there are roughly 140,000 holidaymakers currently travelling with its German subsidiaries. While the UK government is chartering flights under Operation Matterhorn, insurance companies are expected to be central to the response for German-based customers.

Meanwhile, Greece's Tourism Minister Haris Theocharis says Thomas Cook has around 50,000 customers currently in the country, with around 22,000 of them expected to be flown home over the next three days.

After the repatriation to various countries, there will be longer-term effects on tourism. The head of Turkey's Hoteliers Federation says Thomas Cook's collapse could cost the country 600,000 to 700,000 fewer tourists per year. There are currently 45,000 Thomas Cook tourists in Turkey.

How it unfolded

After 178 years of trading, Thomas Cook was closed down by three simple economic factors: debt, confidence and the internet. In 2014 the group had announced a new partnership with Chinese investment group Fosun International, which became its largest shareholder. However, its debts had piled up to around £1.7bn ($2.1bn) and in May 2019 it issued its third profits warning in less than a year. 

In August, Thomas Cook agreed a $1.1bn rescue package under which Fosun Tourism would take over its tour operations while creditor banks repossessed its airline. That deal collapsed when the banks requested an additional $248m in contingency funding. 

In desperation, over the weekend Thomas Cook requested a $186m bailout from the UK Government, but with the strong suspicion that the company's problems ran far deeper than cashflow, the request was refused. 

"Clearly, that is a lot of taxpayers' money," said Prime Minister Boris Johnson, "and sets up, as people will appreciate, a moral hazard in the case of future such commercial difficulties that companies face. One's driven to reflect on whether the directors of these companies are properly incentivised to sort such matters out."

Thomas Cook: a brief history

Thomas Cook was a trailblazer whose company's influence might have left him amazed and possibly horrified. Cook was a 32-year-old cabinet-maker when he had the idea that would change tourism forever: To set up a travel agency, charging for facilitating transport. 

Cook, a teetotaller, had the idea in 1841 while walking around 15 miles from his home in Market Harborough to a temperance meeting in Leicester. For the next meeting, he organised a train and charged a shilling per person. 

From these humble beginnings, he capitalised on the growing interest in tourism and organised package tours around Europe and, by 1872, the world. At its peak, the Thomas Cook firm served an estimated 22 million customers per year, some expanding their minds through travel, some seeking the sort of alcohol-soaked getaways that wouldn't have pleased Cook's temperance society.

But after going through various ownerships - until 1972 it was owned by the UK Government, then a consortium of banks, then from 1992 a German consortium - Thomas Cook has eventually foundered on that immovable fact of modern commerce, the internet. 

With online research, communication and booking now available to everyone, the need for specialist travel agents has reduced enormously, especially among a younger generation. The teetotal cabinet-maker's globe-straddling company may not be the last to collapse.