Only weeks ago, Tiger told told passengers it had been given approval to resume flights by the Indonesian government. Passengers who are now stranded claim they were assured by the airline's staff it would return to business as usual from early February.

The company's decision came after Indonesian authorities said it would have to switch to a new operating model - one the budget carrier, a unit of Virgin Australia, said would take six months to put in place.

"Providing a reliable, low-cost service is critical for Tigerair Australia and our customers, and therefore our only option is to withdraw from flying to Bali altogether," Tigerair Australia chief executive Rob Sharp said.

"We understand the impact that this situation will have on passengers booked to travel to and from Bali with Tigerair, and we sincerely apologise to all affected passengers."

At least six services were due to fly to Bali on Friday, the airline said.

Last month Indonesia revoked Tigerair's permission to fly, saying it did not meet charter flight regulations. Virgin Australia had previously operated the flights, but shifted them to Tigerair in an attempt to restore its international division to profitability.

Tigerair had been expected to resume flights to the island on Friday, but on Thursday evening said final approvals from Indonesia had not been received.

Refunds

Customers who had booked tickets to Bali would receive a full refund, the airline said. Passengers due to travel from Bali to Australia on Friday would be taken on other carriers, including Virgin Australia,

Some customers received a text message on Thursday night, alerting them to the cancellations. Fairfax Media understands some travellers received the SMS message at 11.15pm, after Tiger's customer call centre had closed for the night.

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Photo: Supplied

Other passengers would be contacted "as soon as possible", the airline said.

A statement on the airline's website said its call centre was "experiencing a higher than usual volume of calls".

All refunds would be automatically processed within the next two to four days and sent to customers, the airline said.

'I feel so lied to'

Angela Photo: Facebook

Angela from Oak Park in Melbourne and her husband were booked to fly to Bali on Saturday morning. Tiger still has not contacted her to let her know their flight has been cancelled.

"I feel so lied to," she told Fairfax Media on Friday afternoon.

"If they had [have] refunded [us] earlier, I could have secured another reasonable fare."

Angela paid $791 for the tickets on Tiger. She had to spend $1900, not including baggage, to book tickets with another airline on Friday afternoon.

"There was zero communication. I work at the airport, I spoke to staff and was constantly told that all was fine."

"Seriously, we could have gone to Europe. I have already exchanged my money and paid for accommodation that was non-refundable."

Julia Roscoe Photo: Facebook

Julia Roscoe, who had planned to fly to Bali with three others mid-February, said her entire holiday has been "absolutely ruined" by Tigerair's permanent cancellations.

As a small business owner, Ms Roscoe rarely gets time off and she said she had booked this holiday well in advance in September last year.

When Tigerair was suspended in the beginning of January, the 28-year-old's partner phoned the airline to ask about their flights.

"They assured us that our flights would not be affected and when I requested a refund, just in case, so I could make alternate plans, they refused and again insisted that our flights would not be affected," she said.

Ms Roscoe said there is no way she could afford other flights now and could only cancel the trip, which includes non-refundable bookings for accommodation, transfers and tours.

"They insisted that wouldn't happen," she said.

Tigerair had been carrying hundreds of passengers to Bali each day from Melbourne, Adelaide and Perth since March 2016.

Last month however, Indonesia revoked the Virgin Australia Holdings unit's permission to fly, saying it did not meet charter flight regulations.

The budget subsidiary of Virgin Australia had been expected to resume flights to the island on Friday, but on Thursday evening said final approvals had not been received.

"Providing a reliable, low-cost service is critical for Tigerair Australia and our customers, and therefore our only option is to withdraw from flying to Bali altogether," Tigerair chief executive Rob Sharp said in a statement.

On Thursday night, the airline said all affected customers had been "proactively notified" about the cancellations, but angry customers flooded the airline's Facebook page complaining that they had not been given adequate warning.

"Drove 500 kilometres to Adelaide after being told it's a go ahead. Text at midnight to cancel. Pathetic," passenger Steve Hunter wrote.

Another passenger, Morgan Davies, said: "You would have [known] by close of business today whether you could fly or not and yet still chose to wait til you told your customers. You have lost my business for life."

Tigerair's domestic flights have not been affected and will operate as normal.

Consumer advocate group Choice said Tigerair customers had been given a "raw deal" and should be compensated for both time and money lost.

"Tiger's apologies are unlikely to move customers who have spent time and money planning their dream holiday to Bali only for it to turn into a logistical nightmare," Choice spokeswoman Nicky Breen said.

"From the last minute cancellation for those booked on flights today to the decision to permanently withdraw operations from Bali, customers have been given a raw deal from Tiger.

"For many travellers this is hard earned annual leave and pre-booked accommodation that they can't get back."

Angus Kidman, editor in chief at comparison site finder.com.au,

"Even if people have travel insurance, they are going to say 'you have to take it up with the airline first'," he said.

Minister for Infrastructure and Transport Darren Chester said the matter was one between the airline and the Indonesian regulator.

"However the Australian government continues to work collaboratively with the airline and the Indonesian government. I am advised that Tigerair is taking immediate steps to minimise the impact for the affected passengers," Mr Chester said.

Virgin Australia made the decision to give up on the Bali route for its international unit after posting a 37 per cent fall in second-quarter underlying earnings before taxes on Friday, as tough conditions persisted in the domestic Australian market.

Australia's second biggest airline reported an underlying profit before tax of $45.9 million for the quarter ended December 30, compared with an underlying profit before tax of $73 million a year earlier.

Virgin Australia's shares traded 1.4 per cent lower at 21.2¢ at lunchtime on Friday, while Qantas shares were down 2.7 per cent at $3.21.

With Reuters