LONDON, March 22 (Reuters) - The global travel industry was scrambling on Saturday to reroute passengers and fix battered airline schedules after a huge fire at an electrical substation serving London's Heathrow Airport forced closure of Europe's busiest air hub.

Some flights resumed on Friday evening, but the shuttering of the world's fifth-busiest airport for most of the day left tens of thousands searching for scarce hotel rooms and replacement seats while airlines tried to return jets and crew to bases.

The industry, facing the prospect of a financial hit costing tens of millions of pounds and a likely fight over who should pay, questioned how such crucial infrastructure could fail without backup.

"It is a clear planning failure by the airport," said Willie Walsh, head of global airlines body IATA, who, as former head of British Airways, has for years been a fierce critic of the crowded hub.

The airport had been due to handle 1,351 flights on Friday, flying up to 291,000 passengers, but planes were diverted to other airports in Britain and across Europe, while many long-haul flights returned to their point of departure.

Heathrow Chief Executive Thomas Woldbye said he expected the airport to be back "in full operation" on Saturday.

Asked who would pay for the disruption, he said there were "procedures in place", adding "we don't have liabilities in place for incidents like this".

Restrictions on overnight flights were temporarily lifted by Britain's Department of Transport to ease congestion, but British Airways chief executive Sean Doyle said the closure was set to have a "huge impact on all of our customers flying with us over the coming days."

Virgin Atlantic said it expected to operate "a near full schedule" with limited cancellations on Saturday but that the situation remained dynamic and all flights would be kept under continuous review.

Airlines including JetBlue, American Airlines, Air Canada, Air India, Delta Air Lines, Qantas, United Airlines, British Airways and Virgin were diverted or returned to their origin airports in the wake of the closure, according to data from flight analytics firm Cirium.

Shares in many airlines fell on Friday.

Aviation experts said the last time European airports experienced disruption on such a large scale was the 2010 Icelandic volcanic ash cloud that grounded some 100,000 flights.

They warned that some passengers forced to land in Europe may have to stay in transit lounges if they lack the paperwork to leave the airport.

Prices at hotels around Heathrow jumped, with booking sites offering rooms for 500 pounds ($645), roughly five times the normal price levels.

Police said after an initial assessment, they were not treating the incident at the power substation as suspicious, although enquiries remained ongoing. London Fire Brigade said its investigations would focus on the electrical distribution equipment.

Heathrow and London's other major airports have been hit by other outages in recent years, most recently by an automated gate failure and an air traffic system meltdown, both in 2023.

(Reporting by London bureau; Writing by Conor Humphries; Editing by David Gregorio)

((conor.humphries@thomsonreuters.com; +353 1 236 1915;))