British Airways has slashed its planned recruitment drive for next year and postponed some increases in fleet capacity, directly blaming the UK government's planned increase in air passenger duty (APD) for the decision.
The carrier aid it had intended to create 800 jobs next year, but has now dramatically cut this number.
It said: "Against an already difficult economic background, these fresh tax hikes make it impossible for us to proceed with this level of recruitment, so we expect to reduce this number by about half.
"We will also postpone our plan to bring an extra Boeing 747 into service next summer, and review the use of two others."
It said that suppliers in wales, Northern Ireland and England would all be affected by the move.
"APD is by far the highest aviation tax in the world. It is a tax on economic activity - a tax on jobs in airlines, airports, UK tourism and leisure, and many supplier industries. It is also a tax on doing business with Britain," it added.
The new APD rates will come into effect from 1 April and will show an increase of up to 10%.