Copenhagen - Thousands of passengers scrambled Wednesday to find alternative transport after the bankruptcy of low-cost Danish airline Sterling Airlines.

The airline Wednesday filed for bankruptcy and grounded all flights with immediate effect.

The some 1,100 employees were later informed that they had not been fired but were to remain at the disposal of the liquidators.

In a statement on its website, the airline cited that it had been impacted by the global financial recession that started in the autumn of 2007 and led to a "stagnation in the market."

The carrier also cited "significant fuel cost increases" as a factor that contributed to its problems, as well the global credit crunch that impacted its main shareholders in Iceland.

Rival airlines including the SAS Group, Norwegian Air Shuttle and easyJet said they were prepared to offer flights to stranded Sterling passengers.

Norwegian Air Shuttle said it planned to establish operations in Copenhagen while the share price for SAS, operator of joint carrier Scandinavian Airlines, climbed some 15 per cent on the bourses in Stockholm, Oslo and Copenhagen.

The Sterling statement said that passengers who had bought tickets online would not be refunded and would have to seek alternative flights home.

Danish airports including Copenhagen's Kastrup airport said they were to assess the bankruptcy effects. Sterling Airlines accounted for about 10 per cent of Kastrup's traffic and the airport was "in active talks with a number of airlines to fill the remaining gap," a statement said. (dpa)