Monarch Airlines has ceased trading and all its future flights and holidays have been cancelled, affecting hundreds of thousands of customers.
About 860,000 people have lost bookings and more than 30 planes will be sent by the Civil Aviation Authority to return 110,000 holidaymakers who are overseas.
Monarch employs about 2,100 people and reported a £291m loss last year.
Terror attacks in Tunisia and Egypt, increased competition, and the weak pound have been blamed for its demise.
Theresa May’s official spokesman said the prime minister “feels hugely sorry” for those affected by a “very distressing situation”.
Monarch – the UK’s fifth biggest and the country’s largest ever to collapse – was placed in administration at 04:00 BST – a time when the airline had no planes in the air.
Passengers were then sent text messages informing them flights had been cancelled – but some customers were already at airports.
Who has been affected?
Alan Jee was due to get married in Gran Canaria on Saturday and arrived at Gatwick airport with 30 members of his family.
“I have spent £12,000 on my wedding and now I can’t even go and get married,” he said. “I am gutted, absolutely gutted, and my missus is in tears, an emotional wreck.”
Meanwhile, Mike Olley had been due to fly back to Birmingham from Malaga, in Spain, on Monday.