Bristol airport CEO Robert Sinclair has said Cardiff airport would have a “significant advantage” if the Welsh government won the power to set Air Passenger Duty (APD).
It comes as the UK looks at devolving powers to Wales following the promise to Scotland after the referendum vote last month.
The idea of devolving the duty, which was recommended by the cross-party Silk Commission, was originally rejected but the four main parties in Wales have called for it to be reconsidered.
APD imposes a £13 charge on every passenger flying from the UK on short flights, rising to £97 for the most distant long-haul destinations, with the amounts doubled on tickets in business class.
‘Disingenuous’
Sinclair said he was concerned Cardiff airport would have an unfair advantage if the Welsh government was given the opportunity to cut or abolish the duty, resulting in cheaper flights.
"The argument that Bristol Airport and Cardiff Airport do not compete is disingenuous," he said.
"The two airports are less than 100km apart. Bristol is as convenient as Cardiff for many people who live in south east Wales, and we currently serve 25% of the market for air travel for the entire country.
"This is not about England versus Wales, it is about the market deciding where airlines wish to operate and passengers voting with their feet.
"Selective subsidies or tax systems which favour one government-owned airport over privately operated competitors are not only unfair, they are a waste of taxpayers' money."
However, speaking in the House of Lords last week during a debate on the Wales Bill, the chairman of Cardiff Airport Lord Rowe-Beddoe said that the European Commission had stated that airports with between one to three million passengers can receive state support.
He said: "The Commission recognises that there is a case for government state aid being offered to smaller regional airports, and defines them as those that have between one million and thee million passengers per annum. Cardiff currently handles just over one million.
“The Commission also states that if airports are more than 100 kilometres apart, then they have, by definition, different core catchments, and aid to one will not affect aid to the other.
"I can assure noble Lords that Cardiff Airport is more than 100 kilometres from Bristol Airport. I have actually used my tape measure and each certainly has different core catchments. It is my contention that aid to one will not affect the other."
Cardiff airport was purchased by the Welsh government for £52 million in March 2013 and has reported a 9 per cent increase in passenger traffic since the takeover.