Coalition government plans to increase air passenger tax would blow a £475 million hole in the UK’s £115 billion-a-year tourist trade and cost up to 77,000 jobs, a report has warned.

The study commissioned by budget airline easyJet predicted that proposed changes to Air Passenger Duty rules would lead to an estimated drop of three million in total passenger numbers. This fall would hit GDP to the tune of £2.6 billion per year as hotels, restaurants, visitor attractions and their respective supply chains were all negatively affected by the loss of trade.

Regional airports such as Bristol, Luton and Liverpool would suffer most, while Heathrow would be relatively unaffected as a third of its traffic comprises transit passengers who do not pay the tax anyway.

Carolyn McCall, easyJet’s chief executive, said: “It’s not a fair tax. It’s simply a way of getting money, but makes us uncompetitive in Europe. Spanish or French holidaymakers weighing up where to go will make this part of their calculations and may choose to go elsewhere.”

The Dutch and Irish governments have both done away with departure taxes as they were considered to be damaging tourism.

In late March, the government indicated that it wanted to overhaul the national APD rules. Under the current system, travellers pay a flight tax based on the distance they travel and the class of ticket they buy. Distance is classed into four bands, with travel of less than 2,000 miles costing £12, 2,001 to 4,000 miles £60, 4,001 to 6,000 miles £75 and anything over 6,000 miles £85.

But the government is proposing that the system be rationalised down to two bands, with flights of less than 2,000 miles costing £16 in duty terms and those above 2,000 costing £75.

This would mean that shorter-haul passengers would pay significantly more than is currently the case.

Resultant changes to consumer behaviour as a result of the move would also lead to additional carbon emissions of 360,000 per year, the report said.