Finance minister Philip Hammond stated in the annual budget that Air Passenger Duty would be frozen for short distance flights, but would rise in line with inflation for long-distance flights.

British Airways’ owner IAG said taxes are hindering efforts to fly to new trading markets. “It’s ironic that this Brexit budget has undermined Britain’s global competitiveness by upping Air Passenger Duty, the world’s highest aviation tax again, We want to offer more flights to key trading markets, as our European competitors, but APD stifles route development to new emerging markets. If Britain wants to compete on the global stage post Brexit, it should be scrapped now.”

Passengers flying British Airways paid $874mn in APD last year. A spokeswoman for Virgin Atlantic said customers were already paying a levy that was twice that of any other EU nation, to leave the UK. “APD now accounts for more than a quarter of our lowest fare,” she said.

Hammond said short-haul APD rates for 2020-21 would not rise, remaining at the same level as they have been since 2012. For long-haul, they will increase by 2GBP, while the rates for those travelling in premium economy, business and first class will increase by 4GBP.

Tim Alderslade, the head of industry body Airlines UK, said the planned tax increase sent the wrong signal. “APD is nothing but a tax on Global Britain,” he said in a statement.