Flybe is to start offering financial protection for its passengers following a pledge to aviation minister Karen Buck.
The Scheduled Airline Failure Insurance will cover customers in the event of the airline going bust.
Flybe said it made the promise to proactively seek financial protection as controversy raged over the possible introduction of a £1 levy.
The carrier, which claimed to be the first no frills airline to introduce SAFI, said such measures have “given the government confidence” to avoid bringing in the levy.
The three-year deal with insurance firm AIG will be available from tomorrow and includes lost luggage, sickness and cancellation in addition to airline failure.
Chief commercial director Mike Rutter said: “This sends a clear message to customers that they can be confident when booking low fares.”
