"Hundreds" of TUI passengers received texts from the travel agent telling them that their trips had been cancelled after an eight-hour airport wait, it is reported.
Holidaymakers endured substantial delays before they were finally informed that they would not be leaving Manchester Airport.
Some children even burst into floods of tears after discovering that their getaways had been ruined, The Mirror reports.
It came after passengers endured a four-hour wait to get through check-in and security and another four-hour delay while "waiting for a pilot".
The flight to Kos, out of Terminal 2, was supposed to jet off at 3.45pm, but disgruntled passengers state they would have missed the flight - if it had been on time - due to queues stretching "out of the building" to check-in.
After enduring a further four-hour delay, one family says they were informed by a text from TUI that their trip, including flights and an all-inclusive hotel, were cancelled.
Helen, from Sale, was travelling to Kos with her husband and teenage daughter. They have been left appalled by the treatment, they say.
"It's utter, utter chaos," she said.
"There has been hardly any staff here. Everyone got a text from TUI saying their holidays have been cancelled and to go home. The check-in girls knew nothing, we found out before they did. And they were left to deal with hundreds of passengers complaining, a full flight's worth.
"The police had to come in and make an announcement, a holiday maker was arrested and was in handcuffs.
"We have had to go back through security, show our passports, even though we'd never left the airport. I wouldn't expect this from Manchester Airport and certainly not from TUI. It's just disgusting.
"All the passengers are really angry, there's children crying. We've taken the week off work, my daughter is off school - she'd been looking forward to this holiday, bought new clothes and everything.
"We expected it to be bad at Manchester Airport but everyone is in shock at how bad it actually is. The police had to unload people's suitcases because there were no staff to do it."
George Sharp said his daughter had travelled from Bradford for their holiday to Kos - on the same flight as Helen - and had been queuing since 12pm. They were at the gate ready to board the flight when they received a text from TUI saying their £4,500 trip was cancelled.
"It was like circumstances I've never ever heard of before," George said.
"They went to board and then they cancelled not just the flight but the entire holiday. TUI staff refused to face up to anyone and the police arrived to tell them to go back through security to collect their bags and go home.
"She just got married two years ago so all they've known is Covid since they got married in March 2020 and this was supposed to be a big reset for them and to help them get back to normality. They were with a five-year-old little girl and it's just horrendous. They were just heartbroken and confused.
"It's hard to console her, because what can you say? They had only just got their passports two days ago so they've been stressed to bits over that. It's just been one thing after another.
"To be at the airport for eight hours, face numerous delays and get ready to board to then be told that it's over is just really upsetting for them all. There's been no communication other than a text message."
Jayesh Patel, from Manchester, was due to travel on the same flight to Kos with his wife and their three children, aged 9, 12 and 13.
"We arrived at the airport three hours before our flight, as advised, and the queue for the baggage at T2 was all along the sky bridge up to terminal one," Jayesh said.
"We got through security pretty quickly, but we only had about 20 minutes to go before our flight was due to fly.
"The first time we found out our flight had been delayed by another three hours was when we got to the departure lounge - at no stage did anyone tell us our flight was going to be delayed.
"At around 6pm, they gave us £5 vouchers to buy food but we've still got them as the shops were all so busy or had just began to close.
"At 7.48pm, we received a text to tell us our entire holiday had been cancelled.
"There was nobody at the airport to speak to, but there was a lot of upset and frustration as we all received the text at the same time.
"We all then had to go back through passport control, which was ironic as we hadn't gone anywhere, and back into arrivals to wait for our luggage which was already on the plane.
"Because the airplane hadn't arrived from anywhere, our flight wasn't listed at any of the baggage carousels so we didn't know where to wait - people were visibly upset and children were crying.
"We then had to wait another couple of hours and at this point, we'd spent the whole day at the airport and just wanted to leave."
Jayesh said all passengers were offered a full refund on their flights, £350 in compensation and a £200 holiday voucher, but he says he would rather the voucher was in cash.
"Realistically, I'm not sure we want to book another holiday with TUI at this point," he explained.
"We've travelled with TUI in the past - before the pandemic - but I've got no confidence in them at this point. I can't see these problems being solved in the short-term either so I think I would rather just have the cash, instead of a voucher, so we can book elsewhere."
Speaking about what he and his family now plan to do with their week off, he said they will just spend time together as it looks like they will be unable to book somewhere last minute.
He added: "We thought we'd be waking up this morning going out to have a Greek breakfast somewhere near the beach, but it wasn't meant to be."
A spokesperson for TUI said: "We would like to apologise for the inconvenience to our customers on flight TOM2680 from Manchester and Kos, on Saturday 28th May who were delayed to a combination of factors causing significant operational disruption.
"Unfortunately, we felt the impact to customers holiday was too great and took the difficult decision to cancel the flight.
"We contacted affected customers as soon as we became aware of the change and all customers will receive a full refund within 14 days.
"We understand how disappointing and frustrating this is and we do apologise for any inconvenience caused."
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