Low-cost airline Tigerair has dumped its Australia to Bali flights permanently, saying the Indonesian Government refused to provide regulatory approval for the flights.

Key points: Tigerair suspended flights almost three weeks ago, citing new regulatory requirements

Tigerair suspended flights almost three weeks ago, citing new regulatory requirements Indonesia says airline breached operating license by offering one-way tickets

Indonesia says airline breached operating license by offering one-way tickets Virgin Australia will assist passengers stranded in Bali, Tigerair says

The budget airline said Indonesian authorities had told the carrier they required "an alternative regulatory solution for Tigerair's operations to Bali".

The company said this would take at least six months, and "would compromise the airline's ability to offer low-cost airfares to travellers".

Tigerair said it had today decided to suspend the route permanently.

In a statement, chief executive Rob Sharp said the company's only option was to withdraw the Australia to Bali flight routes permanently.

The statement said Tigerair would work with Virgin Australia to support any passengers still in Bali and needing to travel home to Australia.

The company was also offering full refunds to customers booked to travel to Bali with them.

Tigerair says it had approval

The move follows the company's suspension of flights between Australia and Bali last moth, which saw thousands of people stranded in Bali, and plunged school holiday travel plans for many into chaos.

The company was due to resume flights today, saying it had secured approval to fly using its Airbus A320 aircraft.

Tigerair, which is owned by Virgin Australia, initially claimed the Indonesian Government had imposed "new" administrative requirements which forced the suspension.

But the Indonesian Government hit back, accusing Tigerair of breaching its regulatory license.

Tigerair declined an interview request from the ABC.

Refunds could take time: Consumer Protection

Consumer protection authorities are warning passengers any refunds could take up to a month to be processed, and they should think carefully about spending extra money to continue with their trip.

Consumer Protection WA acting director of retail and services Lanie Chopping said the airline was obliged to provide a replacement flight or a full refund within a "reasonable time".

"We would (have) thought a reasonable time in this case would be no more than 30 days," she said.

Ms Chopping also urged passengers with travel insurance to contact their providers to discuss the terms and conditions, while those who purchased their tickets on a credit card should contact their bank.

"People who have purchased by credit card are actually able to go back to their bank and seek what's called a chargeback," she said.

Ms Chopping said Australian consumer law regulators were attempting to contact Tigerair to get re-assurance they would compensate customers, but passengers concerned Tigerair was not doing enough to compensate them could contact the Airline Customer Advocate.

Aviation commentator Geoffrey Thomas said the move was unexpected, as Tigerair had an in-principle agreement with the Indonesians to come up with a new arrangement for their operations to Bali, and they had started to sell tickets again.

"I don't think the Indonesians will be having regrets, they are really being overwhelmed by visitors to Bali," he said.

"This might be Indonesia's way of turning the tap off."