Tigerair has been forced to cancel its service to Bali indefinitely after Indonesian authorities refused to provide the airline with approval to operate under its new administrative requirements announced in January.
In a statement, the airline said it would take at least six months for Tigerair to implement an "alternative regulatory solution" and that its low-cost airfares would be compromised as a result.
"As a result of this development, Tigerair Australia has today made the difficult decision to withdraw from flying between Australia and Bali permanently, effective immediately," it said.
Customers due to travel from Bali to Australia on February 3 would be re-accommodated by Tigerair onto services back to Australia operated by Virgin Australia and other carriers.
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Tigerair Australia chief executive Rob Sharp apologised to passengers for the situation.
"We have been advised by Indonesian authorities that in order to continue operating our flights to Bali, we would have to transfer to a new operating model that would take at least six months to implement and would compromise our ability to offer low-cost airfares to Australians," he said.
"We will continue to work with Virgin Australia to support any passengers still in Bali and needing to travel home to Australia. We will also provide full refunds to customers who were booked to travel to and from Bali with us.
"Again, we sincerely apologise to our customers who have been caught up in this and we will continue to work around the clock to support them as best we can."
The Indonesian government introduced 'new administrative requirements' in January which led to hundreds of Tigerair passengers being stranded in Bali after the carrier failed to meet the requirements.
On January 19, Tigerair was given the tick of approval to resume flights in and out of the popular holiday island after securing approval to use its Airbus A320.
At the time, a Tigerair spokesman said the airline planned to resume its normal Bali flying schedule on Friday, subject to final procedural approvals being secured.
WAtoday understands Tigerair has since changed its mind about the solution required by Indonesia's government to meet the new requirements, with the new solution being costly and not a requirement at its other international destinations.