LONDON (REUTERS) - Thomas Cook, the world's oldest travel firm, collapsed on Monday (Sept 23), stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.

The UK's Civil Aviation Authority said Thomas Cook had now ceased trading and the regulator would work with the government to bring the more than 150,000 British customers home over the next two weeks.

"Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavour to get people home as close as possible to their planned dates," it said in a statement in the early hours of Monday.

"Thomas Cook has ceased trading so all Thomas Cook flights are now cancelled," it said.

The firm runs hotels, resorts and airlines for 19 million people a year in 16 countries. It currently has 600,000 people abroad, forcing governments and insurance companies to coordinate a huge rescue operation.

Pictures posted on social media showed Thomas Cook planes being diverted away from the normal stands, and being deserted as soon as they had landed.

British Prime Minister Boris Johnson pledged to get stranded British travellers home and revealed that the government had rejected a request from Thomas Cook for a bailout of about 150 million pounds (S$257.56 million) because doing so would have set up a "moral hazard".

"It is a very difficult situation and obviously our thoughts are very much with the customers of Thomas Cook, the holiday makers who may now face difficulties getting home we will do our level best to get them home," he told reporters on a plane as he headed to the UN General Assembly in New York.

Chief Executive Peter Fankhauser said it was a matter of profound regret that the company had gone out of business after it failed to secure a rescue package from its lenders.

"I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years," Fankhauser said in a statement released in the early hours of Monday morning.

"This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world," he said.

The company said on Monday it had entered compulsory liquidation.

It said it made an application to enter liquidation and that an order had been granted to appoint an official receiver to liquidate the company.

AlixPartners UK LLP or KPMG will be appointed as special managers for the different parts of the business.

The demise of Thomas Cook marks the end of one of Britain's oldest companies that started life in 1841 running local rail excursions before it survived two world wars to pioneer package holidays first in Europe and then further afield.

Crippled by its 1.7 billion pounds (S$2.92 billion) of debt, Thomas Cook has been hit by online competition, a changing travel market and geopolitical events that can upend its summer season.

Last year's European heatwave also hit the company hard as customers put off last minute bookings.

The corporate collapse has the potential to spark chaotic scenes around the world, with holidaymakers stuck in hotels that have not been paid in locations as far afield as Goa, Gambia and Greece.

In the longer term it could also hit the economies of its biggest destinations, such as Spain and Turkey, leave fuel suppliers out of pocket and force the closure of its hundreds of travel agents across British high streets.

The British government and the aviation regulator have drawn up a plan to use other airlines to bring Britons home. In Germany, one of the biggest customer markets for Thomas Cook, insurance companies will take charge.

British Transport Minister Grant Shapps said the government had managed to "acquire planes from across the world" to get people home, and call centres had been established to answer travellers' queries.

Customers were told not to travel to airports until they have been told via a special website - thomascook.caa.co.uk - that they were due on a return flight that was being organised by the government.

The British regulator is also contacting hotels hosting Thomas Cook customers to tell them that they will be paid by the government, through an insurance scheme.

That was after some were briefly held in a hotel in Tunisia when staff asked for additional payments to be made.