News that Vanguard Airlines had stopped flying Tuesday left at least one Lawrence couple on a Caribbean cruise with an unexpected vacation activity  finding a flight home. Hundreds of others fliers were scrambling to find replacement flights.

Kansas City Mo.-based Vanguard filed for Chapter 11 bankruptcy protection and indefinitely suspended all flights after federal officials rejected a request to guarantee an $8 million loan for the company.

The company said it would lay off nearly all of its employees, cancel all flights Tuesday and today, and indefinitely suspend all flights scheduled after that.

Ruth Hughes, owner of Holiday Travel, 2112 W. 25th St., said her office was busy all day contacting approximately 250 customers who had purchased Vanguard tickets.

“We have people out on this cruise, and they have no idea they don’t have a flight home,” Hughes said. “We’re going to find them a flight, but it will be up to them whether they want to pay the prices. Unfortunately, they’re probably going to have an unexpected expense awaiting them.”

Other Lawrence travel agencies said they, too, had customers who purchased Vanguard tickets. Most of those people weren’t currently traveling but rather were planning to fly the airline in future weeks.

Refund challenges

For those travelers, finding a way to get their ticket price refunded becomes the challenge, said John Novotny, vice president of operations for Travellers Inc., 831 Mass.

“We’re advising anyone who used their credit card to purchase a ticket within the last 60 days to call the credit card company and see what they can do for you,” Novotny said.

If consumers paid for the ticket with a check or cash, they may have less leverage for a refund, Novotny said.

“We always tell customers that if they can pay by credit card that is the absolutely best way because it does provide some additional protection,” he said.

Some airlines Tuesday were beginning to extend special offers that would allow Vanguard ticket-holders to use their tickets on similar flights. Delta Air Lines announced it would honor Vanguard tickets for travel on standby status to the same destination on Delta, in exchange for a $100 administrative fee. Frontier and United said they would offer discounted fares to Vanguard customers.

Vanguard officials said they hoped the company would find the necessary financing from a “knight in shining armor” to emerge from bankruptcy but admitted the company faced many challenges.

“I always have hope. I’m a very optimistic guy,” said Scott Dickson, Vanguard chairman and chief executive. “But let’s face it. I just can’t guarantee” that Vanguard will be able to resume service.

No federal help

Faced with mounting bills  including months worth of back payments Vanguard owed its aircraft lessors  the airline ran out of options Monday, Dickson said. In its filing, Vanguard listed $95.9 million in debts and $39.7 million in assets.

Vanguard, which operated 70 flights daily between 18 cities, had been trying to make arrangements with a private lender  whom Dickson would not name  but that deal fell through Monday night. The federal Air Transportation Stabilization Board also rejected the airline’s request for an $8 million loan guarantee.

The board, established by Congress to assist the ailing industry in the wake of last year’s terrorist attacks, said the airline’s “proposal did not provide a reasonable assurance that Vanguard will be able to repay the loan.”

Dickson seemed baffled by the decision. Asked why the board turned Vanguard down, he said: “I honestly don’t know , and neither do the members of Congress.”

Sen. Kit Bond, R-Mo., said the board should have approved the loan guarantee.

“I am angry that the agency Congress set up to help struggling airlines after the 9-11 attacks failed to do its job,” Bond said. “And I am angry that 1,200 people have now lost their jobs as a result.”

But industry observers said Vanguard’s problems couldn’t be tied solely to the terrorist attacks. Indeed, Vanguard has never been profitable in its eight years of service.

Work force decimated

Nearly all of the company’s 1,200 employees, including about 915 in Kansas City, were terminated Tuesday after the company’s bankruptcy filing. A skeleton crew of about 60 will stay on in hopes additional financing can be obtained, Dickson said.

Lawrence travel agents said Vanguard was a popular choice for many of their customers because of the airline’s low-priced fares and its nonstop flights out of Kansas City International Airport. But most said they did not think the company’s demise would lead to escalating airline prices out of Kansas City.

“I suppose that remains to be seen, but prior to Vanguard we still had good fares,” said Marcia West, a travel consultant with Carson Wagonlit Travel, 800 Mass. “And Kansas City has traditionally been a market that has below-average prices, so I don’t think that will change.”