Rex has announced it is cutting its Sydney service to Merimbula and Moruya by 40 per cent as part of a nation-wide culling.
The current schedule of 19 flights a week to Merimbula/Moruya will be cut to 12 as the regional airline comes to terms with the effects of COVID-19, also known as coronavirus.
Overall, Rex will be reducing capacity by 45% which includes suspending three routes - Port Augusta, Armidale and Newcastle.
The changes will come into effect from April 6.
Rex's general manager of network strategy and sales Warrick Lodge said, the operating environment "is extremely fluid and we will be will be monitoring the situation closely".
"If the situation worsens we may be forced to further reduce capacity in the interests of maintaining essential regional air services.
"This capacity reduction alone will not be enough and we have reached out to local councils [airport owners] to seek a reduction in airport charges to keep operating costs to a bare minimum so that the reduced services can be sustainable.
"Rex is appreciative of the heartfelt support of many councils, like Parkes Shire Council, who proactively approached Rex in the spirit of partnership to grant a total waiver of airport charges during Rex's hour of need.
"Rex promises to also stand by these local councils in their moment of adversity when Rex is solidly back on its feet."
The Rex network reduction comes a day after the federal government announced a $715million assistance package for the aviation industry.
Rex said it was grateful for the support, but still warned smaller carriers had mere weeks of reserves left and could be facing "annihilation" within six months.
Meanwhile, Rex has followed up its plea to the federal government with a call for additional support from the state government.
"It is praiseworthy what the federal government has done with such decisiveness, but ultimately regional aviation is a state responsibility and the state governments need to respond immediately otherwise they will see the regional carriers collapsing like flies," Rex deputy chairman John Shard said.
"All state governments have substantial budgets for regional airport infrastructure. Now is the time to divert a portion of this to help out the regional carriers otherwise there will not be any airline to fly to the renovated airports.
"State governments should follow the example of the federal government by waiving fees and taxes. Payroll taxes should be waived for one year with effect from 1 Feb 2020," Mr Sharp said
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