All Tigerair flights in and out of Bali on Thursday have been cancelled as the airline's dispute with the Indonesian government drags into a second day.
However, Virgin plans to operate two flights from Bali on Thursday in order to bring as many affected customers back to Australia as possible.
Flights in the early hours of Friday have also been cancelled, leaving hundreds of passengers stranded.
The remaining five flights to and from Bali on Friday are currently under review.
Customers currently in Australia who are affected by the cancellation of Thursday's Tigerair services will be offered a full refund.
Passengers on services that will not be operated on Thursday and passengers that will be on board Virgin's replacement flights on Friday will be contacted directly by Tigerair.
All other Tigerair flights remain unaffected.
The decision was made after the Indonesian government imposed new conditions on Tigerair over its access to Denpasar airport.
"Tigerair was and is in compliance with all original conditions imposed by the Indonesian Government on the operation of its Bali services," the airline said in a statement.
"Tigerair is working with the relevant Indonesian authorities to meet the new requirements as soon as possible."