All travellers aged over 16 from the UK must show proof of a Covid booster jab and a negative PCR test taken within 48 hours before their flight arrival time - or face 10 days of quarantine when they enter Austria.
The new requirement will come into force from 25 December to 31 January.
Crystal said that due to the “short notice” of the new rules and the issues around last minute Covid testing over Christmas, it had made the decision to cancel holidays to Austria on 27 December.
Customers due to travel to Italy via Innsbruck on 27 December will be contacted for arrange alternative flying arrangements, Crystal said.
“We know that last minute testing is extremely challenging, even more so given that the tests would need to be taken on Christmas day or Boxing Day. With limited testing availability and capacity nationwide, we’re aware the vast majority of our customers would’ve been unable to meet this new requirement to travel,” the operator said in a statement.
“We’re sorry for the disappointment this has caused. We know customers have been looking forward to their trip to the mountains with friends and family and we’ve emailed all affected customers with a rebooking incentive.
Crystal said customers would receive a full refund within 14 days and its Crystal Holiday Promise would be extended for fee-free booking changes until 29 December for customers due to travel to Austria between 1-8 January.
Customers booked for Austria from 9-31 January can change their holiday up to 14 days before departure, while guests due to travel from 1 February onwards can make changes up to 28 days before their departure.