Zelly, sorry to hear of your sad loss. If my beloved Golden Retriever had been treated that way, I'm afraid the likelihood is that I would be looking at the world out of a prison cell.
There is NO conceivable excuse for what happened. A strong letter to the Managing Director, stating all the facts, envelope marked 'Private and Confidential', might at least spark some action. Especially if you copy it to the Sun, Mirror, Star, Trading Standards, the CAA and the RSPCA - and indicate in the letter to the MD to whom those copies have been sent.
Fight the bast***s to the end. Keep us posted as to your progress. I for one will NEVER fly with that airline...