At 11.30pm on Sunday night, Thomas Cook sold a package holiday to Greece: a bargain £187 for a week in Corfu in October.

Just after midnight, the firm’s Twitter account reassured a passenger booked from Manchester to Cancun on Monday morning: “Our flights and holiday operations are operating as normal.”

But the signal that the mightiest brand in travel had failed first appeared on the departure screen at Gatwick airport a few hours earlier.

The crew for Thomas Cook flight 508 were ready to go on schedule at 9.45pm on Sunday evening. Around 200 passengers had checked in expecting to be flown to Dalaman in Turkey to begin their holiday.

But then the pilots and cabin crew were instructed to stand down, and the flight status changed to “Enquire Airline”.

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It was the first of many thousands of cancellations that will wreck the travel plans of an estimated one million holidaymakers – and cause concern for the entire British travel industry.

Just after midnight Manchester airport issued a Notice of Detention of Aircraft to a Thomas Cook Airbus A321 on the apron, citing “default in the payment of airport charges”.

Thomas Cook went into administration at the end of a day of high-stakes talks between banks and the Chinese conglomerate, Fosun.

A rescue plan that would have seen £900m in new money pumped into the travel firm fell apart at the last moment, when lenders demanded that Thomas Cook find an extra £200m in financing to get through the winter.

Those negotiations failed and Thomas Cook’s chief executive, Peter Fankhauser, returned to the company’s City of London’s HQ. As dusk fell, his team began the process to close down a firm that has been providing holidays for 178 years.

The hardest-hit people are the 21,000 staff, 9,000 of whom were employed by the UK operation – mainly in travel agencies in hundreds of towns and cities, but also at the company’s headquarters in Peterborough and in resorts abroad.

More than 150,000 British holidaymakers who are currently abroad with Thomas Cook are relatively fortunate, because the government has assured them that they will be brought back with a massive repatriation exercise called “Operation Matterhorn”.

A fleet of 40 aircraft chartered by the Civil Aviation Authority is on standby to operate hundreds of flights to bring the holidaymakers home. Almost all the passengers are likely to be flown home on the day they were originally expecting to return.

Up to one million people with forward bookings with Thomas Cook are in a less-favourable position.

While the vast majority will get their money refunded, that process could take months. In the meantime air fares and holiday prices will soar as other travel firms take advantage of the surge in demand.

Thomas Cook was the pioneer of organised travel, beginning with a Temperance outing from Leicester to Loughborough in 1841.

The travel firm that he founded prospered through the second half of the 19th century and, with allowances for world wars, thrived through much of the 20th century.

In 2007 Thomas Cook merged with Mytravel to become one of the biggest holiday companies in Europe – with operations in Germany, Scandinavia, Russia and elsewhere.

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But scale and a strong brand proved no guarantee of enduring success in travel.

The low-cost aviation revolution and a series of corporate misadventures left Thomas Cook badly wounded in 2011. Although it made a recovery, the firm has been struggling compared with its huge rival Tui and the relative youngster Jet2.