Raging fire threatens to reduce Canadian city to ashes, engulf airport

* Fort McMurray in the heart of Canada's oil sands region

* Commercial flights in and out of city halted, airport at risk

* Mandatory evacuation orders issued for communities to the south (Recasts updates with details on risk to airport, communities to the south)

By Rod Nickel

ANZAC, Alberta, May 4 (Reuters) - A massive wildfire that has forced all 88,000 people to flee the western Canadian oil city of Fort McMurray and burned down 1,600 structures is now threatening its airport and communities well south of the town, authorities said on Wednesday.

With a few neighborhoods already in ruins, worsening fire conditions Wednesday pushed walls of flames towards thousands of more homes in the northeastern Alberta town, in the heart of Canada's oil sands region.

The winds also pushed flames toward the local airport, with webcam images showing black smoke engulfing the airport late on Wednesday evening. Officials confirmed that a hotel north of main terminal had caught fire.

As flames fanned south, officials also issued mandatory evacuation orders for the Anzac, Gregoire Lake Estates and Fort McMurray First Nation communities located about 50 km south of Fort McMurray.

Officials on the scene were forced to evacuate their make-shift emergency operations center for the second time in the span of less than a day as the flames spread south. Officials at the center said in a tweet that they were relocating to the town of Lac La Biche some 250 km south of Anzac.

Authorities said there had been no known casualties from the blaze itself, but fatalities were reported in at least one car crash among the evacuees. Thousands bunked down in arenas, hockey rinks and oil work camps, often short of fuel and food.

A huge cloud of black smoke was visible from well over 60 km (37 miles) away from the town. Traffic on the main road headed south had thinned to a trickle, however, after major jams on Tuesday when the evacuation order was given.

Stretches of the highway had been converted into make-shift campgrounds by people in cars, trucks and recreation vehicles, who were fleeing the inferno.

Firefighting crews have been unable to stop the wildfire, which has charred 18,500 acres (7,500 hectares) since it erupted on Sunday and exploded in ferocity.

"It is a possibility that we may lose a large portion of the town," said Scott Long, an official with Alberta's emergency management agency.

Major oil sands facilities were not in the path of the flames, but companies' efforts to help employees and evacuees and protect pipelines led to a decline in production.