"There is significant competition from Go-Fly in Bristol - there could be a more competitive fare."

The facilities of a major international airport are critical to potential investors

Alun Cairns Conservative spokesman

BA CitiExpress services from Cardiff to Edinburgh, Glasgow and Newcastle accounted for just two percent of total passengers.

However, Mr Horne said demand was there for daily flights to Scotland and was confident the services would be replaced in the near future.

"The potential and performance has led us to be in dialogue with other airlines and expressions of interest," he said.

The Conservatives' Assembly spokesman on Economic Development, Alun Cairns, described the move as a "major blow" to the South Wales economy.

"The facilities of a major international airport are critical to potential investors," he said.

"They need the facility to communicate quickly and effectively with other major cities."

Mr Cairns blamed the Welsh Assembly for not investing in a fast link road to the airport, which has resulted in scaled down investment by airport owners, the TBI Group.

"We have consistently called for an investment in a fast link road to the Airport to meet business needs, all of which have been rejected," he said.

Flights to Dublin will continue to be covered by RyanAir and Air Wales - a new service launching two daily flights to Ireland next week.