Britain's aviation regulator said the country's air traffic operator should review its contingency plans and notify airlines of possible disruption earlier, in its report on an air traffic meltdown in August 2023.

The incident, caused by an IT failure, affected 700,000 passengers in the peak holiday season. The disruption was condemned by the government, travellers and airline bosses, who said it would cost them over 100 million pounds ($127 million)in refunds and compensation.

"The report makes clear once again that airlines and passengers were severely let down by NATS due to its failure of resilience and lack of planning," easyJet Chief Executive Johan Lundgren said in a statement.

The Civil Aviation Authority (CAA) on Thursday made 34 recommendations in its final report, including closer collaboration between the air traffic operator NATS, airlines and airports, and a review of contingency plans.

Airlines cheered the results of the review and called for the government to take action.

"Government must consider all necessary legislative changes to enhance risk-sharing and ensure service providers – not passengers – bear the costs of their own failures in future," said Tim Alderslade, the head of UK airline trade body Airlines UK.

The CAA said it would also examine the incentive framework used to pay NATS.

"The NATS IT failure last year was an unprecedented event that we all hope never happens again, so I welcome the final report and its recommendations to strengthen the sector and restore passenger confidence," transport minister Louise Haigh said in a statement. ($1 = 0.7883 pounds)

(Reporting by Sarah Young and Joanna Plucinska, Editing by Paul Sandle, Alexandra Hudson)