Tigerair Australia said on Friday it would permanently quit flying to Bali after Indonesian authorities said it would have to switch to a new operating model - one that the budget carrier said would take six months to put in place.
Last month Indonesia revoked the Virgin Australia Holdings unit's permission to fly, saying it did not meet charter flight regulations. Virgin Australia had previously operated the flights itself but shifted them to Tigerair in an attempt to restore its international division to profitability.
The budget subsidiary of Virgin Australia had been expected to restart flights to the island on Friday, but on Thursday evening it said final approvals from Indonesia 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.
Customers who had booked tickets to Bali will receive a full refund, the airline said.
Bali is an Indonesian holiday island known for its beaches and rice paddies, and is a popular holiday destination for Australian tourists. Tigerair usually carries hundreds of passengers to Bali each day from Melbourne, Adelaide and Perth.