Chancellor George Osborne today announced that air passenger duty (APD) will be abolished for children under 12 from May next year.
The levy, which is set to be devolved to Scotland following the recommendations of the Smith Commission, will also be scrapped for under-16s from 2016.
The Treasury said the changes would apply to those travelling on economy tickets and would “help to reduce the cost of holidays for families by up to £71 per child”.
Cathal O’Connell, chief executive of BMI Regional, said: “The abolition of the tax for travellers under 12 years of age shows that the government has finally woken up and recognised the punitive effects of APD. This is a step in the right direction, but our fight against this unfair tax must continue.
“We believe that APD – the highest such tax in the world – is holding back economic development, preventing investment and discouraging visitors.”
He added: “The fight against APD, which has risen by up to 160 per cent since it was introduced 20 years ago, is not over. Following the suggestion by the Smith Commission that a devolved Scottish Parliament should control APD – and therefore have powers to shrink or scrap the tax – we urge a reassessment of the whole issue.”
However, Flybe chief executive Saad Hammad said scrapping the levy for children amounted to “tinkering at the edges” and called on the Chancellor to listen to the UK regions and “deliver reform quickly”.
He added: “The Smith Commission’s recommendations to devolve APD to the Scottish Government shows progress, and we believe its implementation would demonstrate the benefits of cutting or abolishing the tax to other nations or regions within the UK, which in turn would deliver a balanced economic recovery.”
EasyJet chief executive Carolyn McCall said: “We support anything which makes travel easier and more affordable for our passengers and we hope this is the first step towards the complete abolition of APD.
“Abolishing APD would boost the UK economy and pay for itself by increasing revenues from other sources. Research by PwC has revealed that the GDP boost to the UK economy would amount to at least £16 billion in the first three years and result in almost 60,000 extra jobs in the UK over the longer term.”