Options are being offered by UK based low cost airlines, Easyjet and Ryanair to passengers hit by the cancellations. Spanair also said it was working with Vueling, Iberia and Air Europa to find alternatives for passengers.

The airline made the decision to cancel flights when applications for government-backed loans fell through and talks with Qatar Airways about taking a stake in the company ceased.

The airline said it was finalizing an agreement with IATA to get refunds for those with tickets that had yet to travel; and a statement on its website advised customers with reservations to contact their credit card company, insurance company or travel agency.

The Spanish government says it is taking legal action against the airline for suspending its flights without proper warning, a case which could result in a 9million euro fine.

Spanair was the country’s fourth largest airline, and this situation has led to suggestions that Europe’s debt crisis may spark airlines from the Mediterranean to the Baltic to consider mergers or risk failure.

China has already threatened legal action and declared it will not cooperate with the scheme. The most recent opposition has come from India, who has warned retaliatory measures are being considered. A meeting between delegates from the countries against the ETS is to be held in either New Delhi or Moscow in the near future, the result of which could affect flights to hundreds of destinations.

Chris Goater, a spokesman for the International Air Transport Association (IATA), said: “Retaliatory measures have been mentioned, and they must be avoided. It could result in a patchwork of different taxes on aviation, with airlines being taxed by two or three different governments. Airlines already have incredibly thin profit margins, so they could certainly result in higher air fares.”

The cost of the tax is being passed onto customers, as this month, Ryanair introduced a fee of 21p (€0.25) per person per flight to cover the cost of the ETS. A spokesperson for the airline, Stephen McNamara, warned that if other airlines hold off doing this, then they will be forced to raise their prices sharply when they finally do, which will impact more so on customers.

Lufthansa said it expects the scheme to cost it around £109 million this year, and has increased its fuel surcharge on European and long-haul flights by £2.50 and £8.40 respectively.

Flights have become much more expensive already with the introduction of the Air Passenger Duty Tax, billed as an environmental tax when it was introduced in 1994. There are calls for this to be lowered to offset the new ETS.

What do you think about the ETS? Please leave comments in the box below.

Ryanair is advising passengers to check its website for information as it might have to cancel all flights to and from Brussels Charleroi Airport.

“If we are forced to cancel flights a list of affected flights will be published on our homepage on Friday 27th January,” it said.

Eurostar announced this morning that services to and from Brussels will be cancelled from 22:00 CET on 29th January to 22:00 CET on 30th January. Trains will only run to and from Lille Europe station, but there will be a limited coach service from there to Brussels Midi stations, however these are likely to be very busy.

Eurostar will allow exchanges free of charge regardless of ticket conditions, but subject to availability.

JetXtra was to launch flights from its Humberside Airport base to Palma and Malaga in June. Jet2 is based at Leeds Bradford Airport, 78 miles away.

JetXtra director Daniel Reilly said: “It is absolutely absurd that Jet2, a well known and generally respected airline is attempting to disrupt our services, I cannot believe they would resort to such dirty tactics to stop a new company which poses no threat to them from entering the market, especially at a time when our country is desperately in need of enterprise and job creation.

“The only similarity between our companies is the word ‘jet’, our logos and websites are completely different and Jet2 operate from Leeds Bradford Airport, serving and targeting a different market to that of jetXtra.com.”

In a twist to the situation, JetXtra has been ordered by the Civil Aviation Authority (CAA) to stop selling flights to prevent the sale of unlicensed tickets. JetXtra had advertised that flights were covered under its partner company, CCT’s Atol. CTT holds a licence to carry just 620 passengers in the year to September and only 150 this summer, when JetXtra hopes to carry 9,000 passengers.

A CAA spokesman confirmed the reasons for stopping sales: “CTT sought permission to trade with JetXtra.com. We have not yet approved that and until we do it cannot sell holidays. We would not allow a company to sell seats it does not have a licence for.” The spokesman confirmed: “This has nothing to do with Jet2.”

However, JetXtra claimed on its website that they had stopped sales because of Jet2′s letter: “JetXtra.com have been told by the CAA . . . that until a decision is made by Jet2.com in relation to any legal proceedings, the JetXtra.com trading name will not be allowed on to the Atol licence of CTT Group.”

JetXtra’s director Daniel Reilly said: “Any customer who has already booked should not be concerned as this decision to temporarily halt trading will not affect their booking or financial protection offered under the CTT Group Atol.”

Lufthansa confirmed talks were ongoing “with several interested parties”. It’s been agreed that IAG will get a discount on the agreed purchase price for BMI if Lufthansa fails to offload bmibaby.

For the first time there will also be a base in Billund in Denmark, Wroclaw in Poland, Palma in Spain and Paphos in Cyprus.

The airline is looking to recruit more pilots, cabin crew, engineers and sales and marketing personnel. Its fleet will expand from 270 to 305 aircraft in 2012 in expectation of 80m passengers this year, a 4m increase on last year.

For details on how to apply, go their website.

The local council has been looking at ways to increase capacity and jobs, and is expected to be given the go ahead as the Government are keen to increase airport capacity in the South East without adding runways.

Councillor Robin Harris, chair LLAL, the company that owns the airport on behalf of Luton borough council said: “We’re at the very beginning of a journey that builds on the tremendous success we have seen through the last decade and will ultimately bring huge benefits to Luton and the wider region – with jobs and much-needed income.”

Cllr Robin Harris said: “We will consult actively and listen carefully ahead of submitting a planning application but we must be ready to embrace market demand in the future. The benefits that will flow from the airport’s development will be realised in the local, regional and national economies.”

It is currently unclear where the extra passengers will come from, but it has been suggested that budget airlines could fill the gap and provoke strong competition with Stanstead. Good train links to London will also hopefully attract business travellers.

The report had six key findings:

1. The next generation of experience: Technologies such as augmented reality, gamification mechanisms and smart mobile devices will transform the travel experience.

2. Automatic transit:  Chips, biometrics, long range fingerprinting and near field communications (NFC) can be deployed in a more integrated way to help with speedy check-in and walk through of immigration.

3. Payment with memory: All data on payments made before and during a trip will be integrated, acting as a digital memory of expenditure and activity for individuals, groups and travel industry operators. Intelligent passenger records and contactless technologies could be used to personalise services delivering higher value and more profitable relationships.

4. Intelligent recommendation: As technologies make it easier for people to tag and review all aspects of travel experiences, travellers will be more influenced by peer groups and expert curators.

5. Taking the stress out of travel: Intelligent luggage tags and tickets will give greater reassurance whilst m-Health (mobile-Health) applications will allow travellers to manage and monitor their health and well-being as if they were at home.

6. The business tourist: Continued emphasis on work-life balance and well-being at work may see the rise of the business tourist.

Andrew Curry, director and co-author The Futures Company (which developed the report), said: “We wanted to avoid making techno-centric assumptions about the future of travel – and painting a picture of flying cars and intelligent robots in a world that is otherwise unchanged from today.

“We hope that this study will challenge, provoke and stimulate thinking around how we will all be travelling in the future.”

The GMB union has called for politicians to re-look at building a third runway, as it claims it will be much less time consuming and expensive than starting from scratch on an airport hub in north Kent or the Thames estuary.

The CAA‘s Aviation Policy for the Future report concurs with the need for a new runway in the south east of England, as it warns that customers will face increased airfares and less choice on international routes if one is not built.

Mick Rix, GMB national officer for the civil aviation industry, said “This go ahead for HS2 is welcome but it should be extended to Heathrow. GMB calls on all political parties to reopen the issue of the third runway at Heathrow.

“The site for a third runway at Heathrow is adjacent to the existing runways at the airport. Those with expertise to operate an international hub already live in West London. The transport links are mostly there already.

“Heathrow’s worldwide destinations are already decreasing, due to capacity constraints, which have not been addressed by successive governments. New runways at many European hub airports are already taking Heathrow business.”

What do you think about the case for a third Heathrow runway being re-opened? Is it good or bad?

January started with the troubled BMI threatening to withdraw its Heathrow – Glasgow route after passenger charges at Heathrow were raised (this was confirmed a month later). Ryanair returned to Manchester with four new routes. And the political troubles in Egypt disrupted flights.

Spiraling conflict in Egypt caused complete cancellation of routes to popular holiday destinations in February. Meanwhile, Which? launched a super complaint on airline card fee charges,the cost of Qantas’ engine troubles were revealed, and airlines flying from the UK finally started to show clearer air fares.

March brought faster flight times under a deal signed by traffic controllers. But by far the biggest news of the month was the huge tsunami which hit Japan and led to re-routing of flights to avoid possible radiation risk, and advice to leave Tokyo.

A Skyscanner survey found Spain back in favour for British holidaymakers in April.

In May Belfast Airport started to charge for going for a cigarette break, and the ongoing battle between Unite and British Airways was finally settled!

More natural disasters happened in June with violent aftershocks in Christchurch, New Zealand and volcanic eruptions in Chile.

The News of the World phone-hacking scandal broke in July with airlines withdrawing their advertisements as a result.

In August research revealed the use of smartphones were ruining people’s holidays.

The Rugby World Cup was held in New Zealand in September, where Wales’ hopes were dashed.

The first biofuel passenger flight took place in October, however green campaigners claimed it wasn’t as environmentally friendly as everyone thought.

Europe announced a ban on body scanners at airports in November, but the UK decided to go against the decision.

Finally, December saw 150mph winds hit parts of Scotland, which is where we are now at the start of 2012 as tremendous winds continue to batter the UK once more.

So, what travel news is in store for 2012? Keep up to date here!