Domestic airline Flybe has launched free redundancy cancellation insurance in a bid to boost new year bookings.

The policy has been introduced as fears continue of more large-scale job losses during 2009 as a result of the economic downturn.

The regional carrier’s Book with Confidence guarantee means anyone who books flights, car hire and hotels through Flybe during January for travel before October 24 will be able to cancel if they are made redundant before they travel. Any or all of the customers on the booking can  receive a full refund under the new policy, which is free of charge.

Passengers need to have worked for the same employer continuously for more than two years under the policy, which excludes self-employed customers. They will be able to claim back costs, including the flight fare, booking and baggage fees, pre-paid car hire, hotels and parking, on receipt of redundancy documents.

Chief commercial officer Mike Rutter said: “These are unprecedented times and Flybe wants to do its bit to keep the economy moving.”

The policy has been put together with Flybe’s insurance partner AIG UK.

Flybe operates routes out of Birmingham, Exeter, Manchester, Norwich, Southampton, the Channel Islands, the Isle of Man and Belfast City.