THE operation to bring home more than 150,000 holidaymakers stranded following the collapse of Thomas Cook will cost up to £100m - £50m less than the minimum bail out the travel company asked for.

Transport Secretary Grant Shapps has announced that the government and CAA has hired dozens of charter planes to fly customers home free of charge as part of Operation Matterhorn.

And he revealed that a similar operation to support Monarch customers, after that airline went under in October, 2017 cost £50m. And he said that was "50% smaller".

He said the company had asked for between £150m and £250m but it relied on getting a further £900m from an "outside company" to invest in them and "the whole deal just didn't come together".

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

Asked why they did not use the money for Operation Matterhorn to help bail out Thomas Cook, and save jobs and passenger disruption he said: "The problem for Thomas Cook is they have a £1.7bn debt and really haven't moved with the times in terms of the way that people are booking holidays.

"The problem was that there really wasn't a sustainable company there, putting aside the fact that governments don't usually invest in travel companies. It is not a strategic part of the economy.

"They were asking for up to £150m but in the end the taxpayer would have lost that money and we would have been in exactly the same position we are in today."

He told Sky News: "I would dearly have loved to see Thomas Cook saved, it just wasn't a practical way forward, whereas repatriating people, I think, is the right way to go."

He said people were out of a job "because a travel company has gone bust" and added: "What we are doing is setting up immediate assistance, a taskforce, we have emergency meetings to make sure all the help and support is in place."

Earlier Boris Johnson said the company’s request for a £150m bailout from the taxpayer was rejected because of the “moral hazard” it would create for other businesses to fail.

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

And he questioned whether action needed to be taken to stop the directors of travel companies escaping responsibility for rescuing their customers.

Stranded passengers will have their hotel and new flight bills paid for by the government's Civil Aviation Authority, funded through payments made by all airlines to a shared emergency fund as part of their licences to operate.

Mr Johnson said: “It is perfectly true that a request was made to the government for a subvention of about £150m​.

“Clearly, that is 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.”

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."