Several options but they hinge on the established protocol that:
The flight/s immediately AFTER the one that is cancelled - operate as normal. That is to say, the pax on the canx flight go to the back of the queue. So they get distributed to:
- other flights of the same carrier to the same destination
- same carrier but might accept a connecting flight and compensation
- flights of other carriers to destination with whom there is a preexisting agreement
- to hotels to wait for a spare seat
- to home with compensation if their trip was not urgent and they decide not to travel - or would have missed the meeting by that time
- If diverted or a domestic flight, they might be oferred train/coach/taxi
Small carriers do not have spare capacity on tap but will usuually have an areement with 'white tail' companies who do. They have aircraft and crew on standby for exactly this kind of problem and the carrier can call them in to take the place of a machine that 'went tech' (technical failure causing it to be grounded).
Large carriers do have
some spare capacity but usually only held at major hubs as the cost of an airframe and crew waiting is very high. However, they will know year to year how often they need such a 'spare' These large companies ALSO use the white tail companies to 'sub' for a flight that cannot operate.
They way in which a cancellation is handled depends mainly on where it happens. if at the carriers hub - fairly easy to deal with, But if the aircraft arrived at a remote point and then is unable to leave - that's obviously a much bigger problem. Also, whether the carrier is full service or LCC will change what happens to you because you have paid for the fare that you want, legal requirements aside.
An international or domestic flight will alter the options available. Further, each carrier has a list of which option is chosen first and those are based on cost, as you can imagine!
Lastly, the nature of the fault can affect things. if it's something that a local approved maintenance crew can fix overnight? Or will it require spares? Sometimes the aircraft is permitted to fly - but not with passengers. This is called a 'ferry' flight and will get the machine to a maintenance base. one in a while, a machine has to wait at a small airport for spares and a trained maintenance crew.
So there is no single answer.