Hundreds of tourists were stranded on Saturday in France's Indian Ocean island of Reunion after regional airline Air Bourbon went bust, cancelling all its scheduled flights.

Some 250 passengers gathered on Saturday at the airport in the picturesque island's capital Saint-Denis, where they had been due to catch a flight to France aboard the company's only Airbus A340.

The passengers were told the loss-making firm, launched in June 2003 by a group of private investors, had suspended its activities after failing to agree on a rescue plan with the regional government.

Angry tourists shouted at Air Bourbon President Erick Lazarus, who had come to the terminal to explain the situation.

Regional representative Paul Verges asked Prime Minister Jean-Pierre Raffarin to provide funds for chartering extra flights and to help find new jobs for Air Bourbon's 165 staff.

Rival firms Air France, Corsair and Air Austral agreed to take on anyone stranded in Reunion or mainland France, for a fee of EUR300 (USD$400) excluding airport taxes.

However, many flights from Reunion to Paris are fully booked at this time of year, the high season for tourism in this tropical island.

An estimated 1,000 passengers were booked to fly on Air Bourbon's four scheduled flights next week, of whom 80 percent were tourists. Some 10,000 people were due to travel with the airline in the next few weeks.

(Reuters)