Austria began Thursday organising the repatriation of thousands of passengers stranded by the grounding of the airline Niki after Lufthansa dropped plans to buy it.

Niki, whose roughly 20 planes served resorts in southern Europe and north Africa, ceased operations late Wednesday after applying to open insolvency proceedings.

This followed Germany's Lufthansa dropping its interest in acquiring Niki together with large parts of Niki's parent company Air Berlin because of EU competition concerns.

Air Berlin triggered bankruptcy proceedings in August after losing a cash lifeline from its biggest shareholder, Etihad Airways, and was grounded in October.

The European Commission said Wednesday that Lufthansa's move was "regrettable".