SYDNEY • Qantas' low-cost subsidiary Jetstar and rival Virgin Australia cancelled all flights between Australia and Bali yesterday.

Thousands of holidaymakers had their travel plans thrown into chaos as the ash cloud from a volcanic eruption near Bali last week continued to affect air services.

Virgin Australia initially announced yesterday morning that flights departing Australia would resume as scheduled but later cancelled all flights in and out of Bali.

The airline, which has cancelled at least seven flights since Mount Raung in East Java erupted last week, hopes to resume services tomorrow, reported the ABC.

Jetstar was forced to cancel 12 flights over Wednesday and yesterday after cancelling at least eight last week.

July is Australia's peak season for overseas holidays with the combination of the mid-year school break and people escaping the winter chill.

The cancellations are putting the airlines under pressure to get travellers home before the school holiday period ends today.

Jetstar has offered travellers affected by the cancellations rebookings on to other flights within seven days, with no added charges.

Flights to and from Bali, one of Australia's most popular holiday destinations, have been disrupted since Mount Raung erupted last Sunday. The volcanic ash is about 150km from Bali and has been drifting towards the island's airport in Denpasar.

Volcanic ash can contaminate the fuel and water systems of aircaft and cause engines to flame out.

XINHUA