Thousands of travellers were facing up to losing airfares amounting to millions after the collapse of Scottish-owned airline Zoom.

As many as one in five of the 40,000 people holding now useless bookings with the low-cost carrier will have to fight with other creditors to get any of their money back.

Most customers who paid for their flights by debit card or cheque were yesterday told that they were not entitled to refunds.

Zoom, owned by Lanarkshire travel entrepreneurs John and Hugh Boyle, suspended operations on Thursday evening after soaring fuel costs crippled its finances.

Its collapse left some 4500 UK nationals stranded on either side of the Atlantic, including families trying to attend weddings and funerals and Rangers' new signing Maurice Edu, who was stuck in Toronto.

Meanwhile, in another sign of the worsening crisis hitting the airline industry, Alitalia said yesterday that it has filed for bankruptcy protection, taking the first step in a plan to restructure and downsize. Italy's failing national carrier has asked the government to appoint an administrator and has declared insolvency to a Rome court.

Hugh Boyle, Zoom's chairman and majority shareholder, yesterday said: "We are trying to make as many passengers as possible aware of their options in terms of alternative flights and the possibility of securing refunds for the flights they booked with Zoom.

"As things stand, there is good availability of alternative flights as we have passed the main holiday period. We believe the majority of passengers who booked with us should be able to secure an alternative flight.

"We have been in contact with other airlines including BA, Virgin and flyglobespan, in particular, and they have made clear the availability of alternative flights."

Zoom said it believed the majority of fliers would get their money back, including all of those who booked through a credit card or a travel agency. Some customers will be entitled to insurance payouts.

Several operators, including holiday company Canadian Affair, put on extra flights. Many families due to fly out within the next few days failed to find alternative or affordable flights.

Zoom said around 10,400 based in the UK and another 20,000 from outside the country have made return bookings with Zoom over the next 12 months, most for next summer. Another 10,000 seats have been sold to tour operators.

Abta, the association of travel agents, yesterday called on the government to require all airlines to provide financial protection for their customers.

Abta chief executive Mark Tanzer said: "This failure in a tough economic climate, along with numerous other airline failures this year, highlights the importance of having financial protection in place when you book flights."