It's unfortunate, but very much a hard lesson with a simple solution for all. Even if a card is cancelled, hang onto it until everything charged with it has been flown. Doesn't need to be cluttering your wallet, but needs to be somewhere with other documents.

Carriers use third-party fraud detection services to flag suspicious transactions. No idea what about OP's transaction caused this, but factors here could include the internal flights, the method of purchase, the fact that the card was apparently cancelled and so on.

Once this has been demanded, you are at the carrier's mercy. Here there was none.