A travel agency selling seats on the airline accused of asking passengers pay for extra fuel to fly home has ceased trading.
Astonbury Ltd, trading as Skyjet UK, held an Atol and the Civil Aviation Authority said it would be stepping in to “assist repatriation for all customers”.
The Essex-based travel company sold flights to Amritsar in India from Birmingham on the Austrian airline Comtel.
The CAA said it has “taken steps to protect passengers currently abroad and those who had booked future trips with Skyjet.
“The CAA estimates that there are around 200 people currently overseas and they will be able to return to the UK thanks to the CAA’s Atol protection scheme. The CAA will be making arrangements to assist repatriation for all customers.
”Passengers who booked Atol protected trips with Skyjet but have not travelled will be able to claim a full refund from the CAA.”
But travellers who booked flight-only deals would not automatically be covered.
A Comtel Air flight from Amritsar to Birmingham was grounded in Vienna on Tuesday by its Spanish carrier Mint Lineas Aereas due to financial issues.
Passengers said they were “held to ransom” and asked to pay a total of £23,000 to continue their journey.
Comtel majority shareholder Bhupinder Kandra said money paid to travel agents had not been passed on to the airline.
Comtel has cancelled UK flights this weekend.