Albania's low-cost carrier Albatros Airways has been suspended in a streak of bad luck that has left passengers stranded.

"Solid facts show it lacks the capacity to manage the transport of passengers," Albania's Civil Aviation Director Gazmend Dibra told reporters this week after suspending flights.

He said unpaid debt of EUR447,412 (USD$565,000) was the reason for grounding Albatros. But the airline, which operates several flights a week to seven cities in Italy, says it is being victimized.

"Several hundred passengers have been re-routed to a competitor company, without so much as consulting us and in full disrespect of our existing passenger protection agreements," said Albatros president Aleksander Hoxha in an open letter.

Albatros was founded in 2004 and operates Fokker 100 aircraft.