With a short online message, Danish airline Primera Air announced it was ceasing trading on Monday night.
The airline was a relative newcomer to flying from Malaga airport and included London and Birmingham among its destinations. Last year it carried 46,000 arriving and departing passengers from the Costa del Sol and so far this year it had carried 21,915 passengers, according to official data from Aena, the airport operator.
Passengers were taken by surprise and those already on holiday were advised to make other arrangements to travel home. Customers who were flying as part of an ATOL or ABTA backed package holiday stood to get compensation, industry sources said. However those who have booked only flights cannot secure refunds.
The airline flew from eight other Spanish airports and rival airlines, including Norwegian and Ryanair, were quick to offer extra deals and routes to stranded passengers.