Boris Johnson pledged action while saying it was a "moral hazard" to step in to save troubled holiday firm Thomas Cook from collapse.

The Prime Minister spoke out as he pledged action after the travel giant went under, leaving 160,000 Brits stranded abroad.  And he also questioned whether company directors were properly incentivised to "sort such matters out".

The tour operator's failure puts 22,000 jobs at risk worldwide, including 9,000 in the UK.

The UK Civil Aviation Authority (CAA) said it has launched Britain’s largest peacetime repatriation to bring home stranded  passengers. 

All of the travel company’s flights have been cancelled - that means the 105 aircraft it operates, according to its website, have been grounded. 

The fate of what is one of the world's oldest and largest travel companies, came after banks, including Royal Bank of Scotland and Lloyds Banking Group, which were bailed out by the taxpayer over years ago,  demanded an extra £200m of funding to tide it over the winter period.

There are 600,000 Thomas Cook travellers who have been left stuck overseas with one in every four of those from the UK. 

The government and the CAA has hired dozens of charter planes to fly customers home free of charge in an emergency operation, codenamed Operation Matterhorn.

The airlift is almost twice the size of the repatriation effort required when Monarch went bust in October 2017. 

In that instance, the CAA put on 567 flights which brought almost 84,000 passengers back to the UK. 

The Herald: Travel group Thomas Cook has revealed plans to cut more than 500 UK jobs

Shadow Chancellor John McDonnell said the government should have stepped in to save Thomas Cook, saying: "Sometimes it is worth the government intervening and stabilising the situation whilst there is time to work out a plan for the future of the company that protects the consumers as well as the workers.

"They have an ideological bias against the state intervening at all."

Transport secretary Grant Shapps said all customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home as close as possible to their booked return date and asked for patience from travellers as the returns were sorted out.

Landing on an RAF flight in New York for a UN summit, Mr Johnson said the Government’s “thoughts are very much with the customers who may now face difficulties getting home”.

He hinted that executives of travel firms that collapse could face future sanctions.

He said it was time to “reflect on whether the directors of these companies are properly incentivised to sort such matters out”.

He said it did not seem the government could have done more to help, for example agreeing to Thomas Cook’s request for a £150m bailout.

READ MORE: Thomas Cook warns it could 'run out of money' and go bust

“It is a very difficult situation, and obviously our thoughts are very much with the customers of Thomas Cook, the holidaymakers, who may now face difficulties getting home,” he said. “We will do our level best to get them home. There will be plans ready to deal with that if it is necessary.”

On the bailout request, he said: “Clearly, that’s a lot of taxpayers’ money and sets up, as people will appreciate, a moral hazard in the case of future such commercial difficulties that companies face."

And he added:  “I do think we need to look at ways in which tour operators, one way or another, can protect themselves from such bankruptcies in the future - to make sure that companies such as Monarch or Thomas Cook don’t in the end come to the taxpayer for help," he said.

“One way or the other, the state will have to step in to help stranded holidaymakers."

And in a message to the firm’s management, he added: “One’s driven to reflect on whether the directors of these companies are properly incentivised to sort such matters out.”

Business secretary Andrea Leadsom said she would write to the Insolvency Service to ask them to “fast-track” their investigation into the circumstances surrounding Thomas Cook going into liquidation.

The CAA said stranded passengers of Thomas Cook may not receive financial compensation until late November.

“This refunds service will seek to process all refunds within 60 days of full information being received,” it said. This means that UK consumers covered under Atol protection could have to wait until late November to get their money back.

READ MORE: Thomas Cook told to find £200m as it tries to stave off collapse

The CAA added: "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. This will apply to both ATOL protected passengers and those who are not protected."

Thomas Cook package holiday customers will also see the cost of their accommodation covered by the Government, through the Air Travel Trust Fund or Atol scheme, the Department for Transport said.

Mr Shapps added: “Thomas Cook’s collapse is very sad news for staff and holidaymakers. The Government and UK CAA is working round the clock to help people.

“Our contingency planning has helped acquire planes from across the world - some from as far away as Malaysia - and we have put hundreds of people in call centres and at airports.

“But the task is enormous, the biggest peacetime repatriation in UK history. So there are bound to be problems and delays.

“Please try to be understanding with the staff who are trying to assist in what is likely to be a very difficult time for them as well.”

Thomas Cook's lenders issued a statement, insisting they were “extremely supportive”.

“Unfortunately, and notwithstanding the efforts of all stakeholders, the £1.1bn funding requirement to adequately recapitalise Thomas Cook has ultimately proved too significant.

"The Lenders providing finance facilities to the Group have been extremely supportive stakeholders, including through two periods of financial distress and have stood behind Thomas Cookover the past twelve months, a period where the Group saw cash outflows of about £1bn, maintaining that position over the crucial and busy summer holiday period.

“Obviously, the Lenders are deeply disappointed that it has not proved possible to rescue Thomas Cook. In partnership with other stakeholders, the Lenders worked tirelessly to examine all options within the timeframe required.”

Peter Fankhauser, Thomas Cook's chief executive, said the firm's collapse was a "matter of profound regret" and apologised to the firm's "millions of customers, and thousands of employees".

"Despite huge efforts over a number of months and further intense negotiations in recent days we have not been able to secure a deal to save our business," he said.

He added: "It has been my privilege to lead Thomas Cook. It is deeply distressing to me that it has not been possible to save one of the most-loved brands in travel."

Just four months ago Thomas Cook warned that Brexit uncertainty was hurting its business.

In May, the company said hat customers had been postponing their holiday plans, saying: "There is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.”