The decision to rule out new runways in south-east England means Britain will lose its international competitiveness, a travel boss has warned.
John McEwan, chairman of industry travel body Abta, said rejecting airport expansion was "unacceptable".
He also said ministers should go further with plans to reform the Air Passenger Duty.
The government scrapped plans for a third runway and sixth terminal at Heathrow when it took office in May.
It also ruled out proposals to build a major airport in the Thames Estuary or Kent to increase flight capacity for London.
'Growth and jobs'
Speaking at a travel conference in London, Mr McEwan said: "We don't think this is acceptable. It means that, over time, Britain will lose its international competitiveness."
London Mayor Boris Johnson and business leaders in the capital have already argued the region would benefit from increased aviation capacity as it would deliver growth and jobs for a long time to come.
But John Stewart, of anti-airport expansion group Hacan ClearSkies, has argued there is no economic case for expansion.
He said: "If you put all London's airports together - Heathrow, Gatwick, Stansted, London City and Luton - you have more airport capacity than any other city in the world."
Mr McEwan also told the conference government plans to strengthen the financial protection process for holidaymakers should also go further.
He said they only covered around half of travellers and wanted to see every holiday protected "regardless of how it's booked".