Virgin Atlantic chief Richard Branson has lashed at the UK government’s handling of the ash crisis, saying it should pay compensation to airlines as there had been “no danger at all to flying”.

“This was very much a government decision to ground the planes and we would suggest that the government should compensate the industry,” Branson said in London.

The Internatinoal Air Transport Association (IATA) said the industry had lost at least $1.7 billion due to the closure of airspace across northern Europe.

Branson added: “Behind the scenes, our engineers and all the experts were telling us that there was no danger at all to flying and that the danger would have been if we had flown close to Iceland through the volcano.”

He explained that airlines could quite have safely flown through “plenty of corridors” and said: “I think the government has accepted that there was overreaction.

“A blanket ban of the whole of Europe was not the right decision.”

Virgin Atlantic said it is receiving “many calls” from passengers offering to give up their seats for passengers who have been stranded by the volcanic ash.

It added that this will be possible without penalty for some flights subject to certain conditions.

Meanwhile, British Airways is asking customers with long haul bookings up to May 2 to consider giving up their seats to help stranded passengers get home.