Air passenger duty (APD) will be abolished on tickets bought for children under 12 flying economy class from May 1 and will scrap it completely for all those under 16 from March the following year.
An economy ticket to most European destinations currently attracts a £13 charge with the tax rising to £71 per ticket for those travelling further afield.
George Osborne also announced he would force airlines to list fuel surcharges separately from ticket prices in the Autumn Statement.
Labour said the recent decision to give the Scottish Government control over APD could disadvantage airports in northern England and the Chancellor should set out a mechanism to make sure they are on an equal footing.
The Chancellor said he wanted families to benefit from the fall in oil prices and said the duty charged at the petrol pumps would remain frozen.
“We’ve cut fuel duty and we will keep it frozen,” he said.
RAC Foundation director Professor Stephen Glaister said: “The Chancellor is pushing for more transparency in the pricing of airline tickets, so now he should also back our call for pump receipts to show how much of the price of petrol and diesel is tax.”
It was also announced that the Government would press ahead with plans to introduce signs on motorways which display the price of fuel at service stations to help promote competition and lower fuel prices.