The Qantas Group has announced its regional airline will replace the mainline service to Hobart, making its employees at the airport redundant. The ground- handling staff will be replaced by subcontracted workers.

The airline said the changes were necessary to remain a competitive force in Australian aviation.

"This change is about making sure we have the right aircraft on the right routes in support of leisure and business travel opportunities between Tasmania and the mainland," a Qantas spokesperson said.

QantasLink will start a tender process for its ground-handling services, while Qantas employees will be offered redundancy packages and redeployment.

QantasLink aircraft will be upgraded to Boeing 717 jets in April and the number of flights between Tasmania and the mainland will increase by 14, with an extra return flight a day on the Hobart to Melbourne route.

Qantas said 30 cabin crew and 15 pilots were being recruited from Hobart to work on QantasLink jets.

Tourism Industry Council Tasmania chief executive Luke Martin welcomed the increase in service frequency, saying it would benefit the state's tourism industry and economy.

Australian Services Union assistant secretary Igor Grattan said the airline had made a "short-sighted and inexplicable decision" and called for it to reconsider.

Independent Denison MHR Denison Andrew Wilkie said it was no wonder the company was in trouble financially - "abandoning destinations" such as Tasmania.