Chancellor George Osborne’s emergency budget pledge to replace Air Passenger Duty with a per plane tax has been given a “cautious welcome” by Flybe.

But the leading domestic carrier warned that a uniform per plane tax would “disproportionately affect the economics of the UK regions” as they represent 44 per cent of passengers but 62 cent of of flights.

Chairman and CEO Jim French said: “Dozens of routes relied upon by British businesses and families who don’t live in London are only feasible as a day return by air, but can only be flown economically on the right size aircraft.

“A blanket per plane tax would incentivise the use of large, inefficient, polluting aircraft and artificially stimulate discretionary travel on these aircraft, which use old technology but as a result have a low capital cost and a high environmental impact.”

The government is to consult on a replacement for APD – which is due to rise again in November, before making a final decision.

French said: “Flybe believes it is vital that any consultation on per plane duty (PPD) must be meaningful and engage with all industry and external stakeholders and we look forward to the process between now and any decision being very clearly laid out.” 

He added: “Flybe is in favour of a per plane tax providing it is based on the emissions of the actual aircraft type and then is banded by the distance travelled. 

“It should also reflect allowances for the lower load factors predominant in the areas outside of London and provide lower rates for start up routes. 

“This would reward those airlines like Flybe who have invested in cleaner modern aircraft technology and incentivise those who have not.

“Flybe also supports the inclusion of freight planes, connecting passengers, business jets, private aviation and all commercial aircraft with no minimum size restriction.”